The Sunday Mail
Business Reporter
GOVERNMENT has started licensing the SMEs Bank after securing US$10 million in capital for the institution.
Small and medium-sized enterprises employ 60 percent of Zimbabwe’s population and contribute about 50 percent of GDP.
However, without collateral — especially immovable properties — most small businesses fail to access credit.
Last week, Small and Medium Enterprises Development Corporation general manager Ms Gladys Kanyongo said the process of establishing a bank to fill this gap was underway.
Smedco will superintend the SMEs Bank.
“So far we have only received capitalisation which was announced in the Naitonal Budget. Our capitalisation was in the form of Treasury Bills, now we are in the process of licensing that bank.
“The processes of licensing a bank are long and some of the things are beyond what I can do in this office, which includes appointing the board members,” said Ms Kanyongo.
The Sunday Mail Business understands that SMEs and Co-operatives Development Minister Sithembiso Nyoni is seeking approval of preferred board members, and sources say an announcement is imminent.
Smedco came under supervision of the Reserve Bank of Zimbabwe following amendments to the Banking Act in 2014.
SMEs, the majority of which are informal, grapple with inadequate financing and infrastructure, and a lack of the requisite entrepreneurial, marketing and management skills.
In the 2017 National Budget, Finance and Economic Development Minister Chinamasa put a six-month moratorium to June 2017 on penalties for non-compliant SMEs registering for value added tax.
Most SMEs are reluctant to register for VAT due to the huge backdated taxes and penalties they are likely to incur upon registration.
Said Minister Chinamasa: “In order to facilitate VAT registration for SMEs that qualify on account of their gross turnover exceeding the threshold of US$60 000 per annum, it is proposed to waive the requirement to account for output tax from the deemed date of qualification for registration. Eligible SMEs will, thus, account for VAT from the date of registration.”
The incentive applies to SMEs whose turnover does not exceed US$240 000 per annum and who voluntarily register for VAT with the Zimbabwe Revenue Authority between January and June 2017.
