GWERU- The South Korea Federation of Small to Medium Enterprises has availed $160 million to local SMEs to fund their operations.
The Zimbabwe Chamber of Small to Medium Enterprises (ZCSMEs) secretary general, Robson Hove told The Business Times on the sidelines of the Buy Zimbabwe Summit in Gweru, which ends today, the funding that will support hordes of struggling SMEs was availed three weeks ago.
He said SMEs will have 20 years to repay the loan with five percent per annum interest rate.
“Three weeks ago, we secured $160 million from the South Korea Federation of Small to Medium Enterprises to mainly support operations of our members,” Hove told The Business Times.
“The tenure is 20 years at interest rate of five percent per annum. We already have the money in the country and we will start disbursing the money after the elections. This money is for the procurement of SMEs machinery and other infrastructure. We are aware that most SMEs don’t have collateral. But, what we will do is to train them, give them the money and bond them,” Hove added.
Following the collapse of the formal sector in Zimbabwe in recent years, the country’s SMEs now make up more than 70 percent of all businesses and are the country’s biggest employer.
Statistics from the Reserve Bank of Zimbabwe indicate that SMEs are contributing more than 60 percent of the country’s gross domestic product.
Last year, government mobilised a $7,6 million loan facility under the Organisation of the Petroleum Exporting Countries (OPEC) Fund for International Development. This has been distributed through the Savings and Credit Co-operatives.
The fund also supports projects related to the setting up of the entrepreneurial institutions across the country.