Zimpapers Logo

Charity Ruzvidzo Business Reporter
TWO funding facilities worth $35 million have been established to support the small to medium enterprises and cooperatives (SMEs) sector, which has proved to be a major contributor to economic growth.

Finance and Economic Development Minister Patrick Chinamasa told Parliament yesterday, during his 2015 national budget presentation, that financing SMEs was at the heart of the government’s economic blue-print, Zim-Asset.

“One of the focal areas under Zim-Asset is to support SMEs, which stand to become a key element in value addition and beneficiation, especially in sectors such as mining, agriculture and manufacturing,” he said.

The minister said development partners have also extended support to the government towards financing SMEs through a number of structured facilities.

“PROPARCO extended two facilities worth $20 million in support of SMEs through NMB Bank and CABS in February and March 2014. PROPARCO is a development financial institution, partly owned by the French Development Agency and private shareholders,” said Minister Chinamasa, adding the facility will be functional for the next five years.

“The facilities, which are for five years, will contribute towards availability of long-term financing for growth and development of SMEs,” he said.

The minister said another credit line worth $15 million has also been set up by the government in partnership with an Arab bank and CBZ.

“The government signed a loan agreement with the Arab Bank for Economic Development in Africa (BADEA) for a $5 million line of credit facility in February 2011 cognisant of the high cost of borrowing encountered by micro, small and medium sized enterprises,” he said.

“The government and CBZ Bank Limited were also to contribute $5 million each to the facility, bringing the total facility amount to $15 million.”

Minister Chinamasa said as of end of September this year, disbursements worth $11.4 million had been made to various beneficiaries under the facility’s two windows, namely Micro Finance and Small and Medium Enterprises.

He said the government and CBZ bank limited contributed $10 million of the disbursements made so far while a balance of $1,4m by BADEA is yet to be disbursed.