Only a few entities are accessing foreign currency from the auction system, the Small to Medium Enterprises Association of Zimbabwe (SMEAZ) has claimed.
SMEAZ CEO Farai Mutambanengwe (pictured) told Business Times that although the amount allotted has increased, only 3 000 SMEs have accessed funds since the launch of the auction system last year.
The number, Mutambanengwe said, was a small figure given the spread of SMEs across the country.
He said while the average allocation to SMEs had increased to US$12m per auction from US$2m, “only a handful of SMEs are being allocated funds when you consider the actual spread of SMEs.”
“If you look at it only medium or larger-sized businesses are getting money from the auction.
“Most of the smaller players are excluded because of the US$2,500 threshold,” Mutambanengwe said.
The Reserve Bank of Zimbabwe governor, John Mangudya, however, said allotments to SMEs were on a steady growth trajectory.
He said the 13.5% growth from the third quarter of 2020 to the second quarter of 2021, was evidence of the importance of the sector to the economy.
After 56 main and 50 SMEs auctions, a total of US$1.72bn had been allotted as at 27 July 2021, representing 98% of the total bids submitted to the auction.
Reflecting the importance of the SMEs sector, the share of allotments of the SME Auction to total allotments grew from 3.5% in the third quarter of 2020 to about 14% in the second quarter of 2021,” Mangudya said.
The SMEAZ says RBZ has to decongest the auction by allowing SMEs to access foreign currency through the banks using the interbank rate.
“The intention was also that SMEs will get their money off the interbank market banks rather than the auction.
“That has also posed a problem because now there is an increasing number of applications from the SMEs and the way the auction works is a manual process and they are no longer able to handle the high volumes of SMEs applications,” Mutambanengwe said.
Economic analysts say SMEs constitute a significant component of the Zimbabwean economy, hence the need to financially support them.