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Govt mulls funding for SMEs, informal sector

Govt mulls funding for SMEs, informal sector

GOVERNMENT is considering availing funding to cushion informal and small-scale enterprises that have not been spared by the global pandemic, COVID-19, NewsDay Business has established.

— By Fidelity Mhlanga

In a statement, the Women Affairs, Community, Small and Medium Enterprises Development ministry solicited a database from member associations for onward submission to government.

“In view of the global outbreak of COVID-19 and the subsequent national shutdown to minimise the spread of the disease, government is considering a number of inventions to minimise the impact of the lockdown. One of the interventions is to assist people engaged in the SME and informal sector through providing assistance to cushion loss of income for subsistence,” the ministry said in circular dated April 1, 2020.

“The Ministry of Women Affairs, Community, Small and Medium Enterprises Development is, therefore, requesting for SME and informal sector associations to compile lists of members of their associations for submission to the ministry provincial offices .The information should include name, sex, ID number, address, ward or area and cell phone number.”

SMEs Association of Zimbabwe founder Farai Mutambanengwe acknowledged receiving the communiqué from the ministry.

“We have asked our members to sign up on a platform that we have created. The expectation is that there will be some form of cash grants or subsidies during this lockdown period, then,perhaps assistance to restart business thereafter,” he said.

According to an International Monetary Fund working paper titled Shadow Economies Around the World: What Did We Learn Over the Last 20 Years? produced in 2018, Zimbabwe has the second largest informal economy as a percentage of its total economy in the world at 60,6%.

The leading country in this respect is Bolivia at 62,3 %.

In South Africa, its government is establishing the fund with the help of the R2 billion donated by the Oppenheimer and Rupert families to assist small businesses.

South African Small Business Development minister Khumbudzo Ntshavheni said businesses seeking funding assistance need to meet several criteria that include being 100% owned by South African citizens, should employ at least 70% nationals and be registered with the South African Revenue Service and tax-compliant.

Unlike in Zimbabwe where application is being done manually to access the fund, businesses are required to register on the SMME South Africa platform.

NewsDay Zimbabwe

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