RYAN CHIGOCHE
Financial Services provider Steward Bank has commended the Export Credit Guarantee Corporation (ECGC) for its role in helping the bank tap into the SMEs market through the provision of credit
guarantees, Business Times can report.
SMEs have been struggling to access loans from various financial institutions in the market as they lacked the collateral required by banks.
With ZWL$500m disbursed so far disbursed by Steward to the SMEs since 2018, the bank’s Head of
SME Banking Brian Zungu commended ECGC for its part in helping the bank penetrate the SME market.
“Looking back I think from 2018 when we started this relationship we have managed to penetrate certain markets which we would not enter on our own. So I would want to commend ECGC for their exciting products which allowed us to enter those markets and promote financial inclusion. Those previously excluded SMEs, we were now able to advance loans and facilities at the back of ECGC guarantees,” Zungu said.
“As a bank, most of our targets market especially under our financial inclusion pillar, we deal with women and youth who hardly have collateral, so you find out that most financial institutions also struggle to tap into that market so the coming in of ECGC allowed us to penetrate that market coming up with tailor-made solutions which had allowed us to tap into the SME for export which is key towards us raising the forex which is much needed into the economy.”
He also commended ECGC for its “speed of execution” when assisting SMEs. ECGC has a system that ensures the turnaround time is such that the need for money is still there.
According to various Small to Medium Enterprises representatives, the issue of access to funding for SMEs has been dragging on for a very long as the banking systems are yet to come up with packages
or requirements that better suit the SMEs sector.
The requirement of title deeds as collateral by most financial institutions for one to advance a loan meant that only a handful of SMEs would qualify to be granted a loan at a bank.
SME Association of Zimbabwe founder and executive officer, Farai Mutambanengwe told Business
Times that capital or loans were one of the biggest challenges SMEs are faced with.
When some SMEs access the funding they are given very little amounts which do not adequately cover the intended purpose, Mutambanengwe said.
ECGC journey began in 1999 when it took on the role of providing credit insurance and guarantee services to assist Zimbabwean exporters and enable them to compete more effectively in export markets.
