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The National Social Security Authority (NSSA) plans to setup a $5million SME fund aimed at supporting projects by players in the sector that are keen on formalising their operations. NSSA director of benefits, schemes, planning and research, Mr Henry Chikova said other players are free to participate in the scheme that will be administered by the Small to Medium Enterprises Development Corporation (SMEDCO).

“SMEDCO sent a proposal for a $5 million unsecured facility funding to roll out the transition to formality. NSSA is, however, proposing creating an account/fund, which would pay project funds directly to suppliers.

“The buyers would also pay directly to the account/fund and profit would be paid to the small and medium enterprises (order-based financing). Other players can also participate in the fund,” he said.

Mr Chikova said currently, NSSA has given SMEDCO $900 000, which will mature on April 9 2016, based on security surrendered to NSSA.

He said NSSA is working on a second retrenchee’s facility that is expected to formalise more players in the SME sector.

He, however, said the absence of a NSSA board could delay the implementation of the facility.

The first facility was launched in 2011 and was targeted at the thousands that had been laid off their jobs and threatening the social security safety nets.

SMEs, however, expressed concern over the stringent conditions for the loans which ranged between $500 and $5 000, repayable over 6-12 months at 10 percent per annum.

“With time, this facility is envisaged to slowly widen the contribution base to NSSA while at the same time formalising most micro small and medium businesses,” he said. – Wires.