High cost of compliance hinders SMEs formalisation

November 25, 2021

NYASHA KUNYISWA

 

The Small to Medium Enterprise Association of Zimbabwe (SMEAZ) says the high cost of compliance is hindering progress in the formalisation of players in the sector.

SMEAZ CEO, Farai Mutambanengwe (pictured), said the sector has been hard hit by the worsening economic condition and funding was a challenge.

“Cost of compliance is affecting the formalisation of SMEs. It is difficult  for SMEs to operate formally  because of compliance requirements and harsh economic conditions,”  Mutambanengwe told Business Times.

He said the sector is also battling the cost of  financial  services sector charges which are exorbitant.

Mutambanengwe also said that SMEs were facing difficulties in accessing forex from the Reserve Bank of Zimbabwe auction system.

“The access of foreign currency is a challenge. There are over 3m SMEs in the country and only 2000 to 3000 have access to forex from the auction,” Mutambanengwe said.

Meanwhile the deputy minister of Women Affairs, Community, Small and Medium Enterprise Development, Jennifer Mhlanga, said local SMEs should  register their operations for them to be able to access funding from the Reserve Bank of Zimbabwe.

“SMEs have been allowed a window to access funding and we are encouraging businesses to register and come forward so that we can assist them to access foreign currency like other businesses on the window of SMEs auction,” Mhlanga said.

She added: “SMEs play a critical role in the country and it is the mandate of the government to assist them  because they create employment and contribute to the development of the economy.

“We are encouraging businesses to be competitive in order to produce quality products in order for them to compete on the international level.”

Mhlanga also encouraged SMEs to use digital platforms to market their products.

 

 

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