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Walter Mswazie Masvingo Correspondent
SMALL to medium enterprises (SMEs) should avoid borrowing if they do not have the capacity to pay back the loans, an official has said.
Zimbabwe Chamber of SMEs Masvingo provincial chapter secretary Sarah Munemo said some small businesses have been forced to close after failing to pay back the loans.

“While it is hard for indigenous business people to raise capital, it is not advisable for small businesses to apply for loans when one is aware that he or she cannot pay back. I would rather start from humble beginnings using my own savings than burdening myself with loans,” said Munemo.

She said it was important for those that borrow to ensure the borrowed money is used for its intended purpose.
“We have some of our members who have borrowed money but there has not been any improvement in their business operations thereby making it difficult to pay back the loans.

“Banks are in business and once you borrow you have an obligation to pay back the money,” said Munemo.
Munemo’s concern comes in the wake of media reports that some banks have stopped giving money to youth groups citing high default rates.

Indigenisation, Youth and Economic Empowerment Minister Cde Francis Nhema recently castigated youths who do not pay back loans.
“When you are given money for projects, make sure you pay back because banks that are managing loans are in business. In actual fact, we want everyone to benefit and if you do not pay back others won’t benefit. The loans are in the form of revolving fund,” said Cde Nhema while addressing youths in Masvingo.