RYAN CHIGOCHE
The Reserve Bank of Zimbabwe (RBZ) has allowed small to medium enterprises to access US$500 a month, a move meant to boost small entities’ operations, Business Times can report.
The RBZ governor, John Mangudya (pictured) said the SMEs facility was critical to ensure financial inclusion.
The interventions by the RBZ comes at a time when the SMEs have been battling to access foreign currency at the Dutch foreign currency auction system, forcing them to source the greenback from the black market, where premiums are high.
But the main challenge is that the bureau of changes have been failing to meet the demand as the facilities are mostly characterised by long queues and the foreign currency is not available on a daily basis and therefore access to foreign currency will remain a challenge especially to the SMEs.
To add to that the forex auction has only managed to give only a handful of SMEs funds considering the number of SMEs in the country although allotments to the SME sector has been gradually increasing showing the importance of the sector to the economy.
Since April this year, the RBZ has been disbursing forex to bureaux de change to allow SMEs and individuals to participate in the foreign exchange market to meet the foreign currency needs.
This arrangement together with the forex auction system was expected to improve the efficacy of the foreign exchange market in the country and enhance the accessibility of foreign currency by small-scale enterprises and individuals through formal channels.
But however foreign currency has continued to be scarce leaving most SMEs on the brink of collapse as they are now buying foreign currency on the parallel market or illegal money lenders who charge extortionate interest rates.
In the outlook, RBZ said it going to refine the foreign exchange auction system to strengthen its effectiveness as a foreign currency price discovery platform by limiting the allotments to the foreign currency available at the time of the weekly auction and paying the same within two weeks from the date of the auction.
In the most recent auction, a total of 1934 bids were submitted on both auction platforms with the bulk of bids coming through the SMEs.
Of the US$46,387,977.84 that was allotted at Tuesday’s auctions, the SME auction allotted US$10,182,138.13.
