Banks to submit landing targets to SMEs

Banks to  submit landing targets to SMEs Dr Mangudya

Business Reporter
THE Reserve Bank of Zimbabwe has directed local banks to capacitate strategic divisions for Small to Medium Enterprises in a move aimed at boosting lending to the SME sector.

Central bank governor Dr John Mangudya said banks should, by end of next month, submit their annual lending targets to the SMEs.

He said in view of the recent structural shift in the economy which gave rise to a large and expanding Micro Small Medium Enterprises sector, banks have an important role to serve the domestic growth drivers particularly with focus on productivity in Small to medium enterprises. As such, the RBZ governor said banking institutions were encouraged to focus their attention on SMEs by developing and implementing SME specific lending models and policies.

“While we note the current efforts by the banking sector to support the SME sector, financial institutions are urged to up-scale lending to this sector. There is scope for banks to convert the current constrains in the SME sector into opportunities for their sustainable business growth,” Dr Mangudya said in his 2016 Monetary Policy Statement.

“Banks are urged to capacitate their strategic business units that manage SME business. In order to effectively serve the SMEs, there is need for a target based credit initiative by banks. Banking institutions are required to set their annual target lending to SMEs categorised by gender, enterprise size and business sector among other variables, and submit their targets to the Reserve Bank by March 31, 2016.”

Dr Mangudya said the banking institutions were encouraged to work with SMEs linked to the value chain of their corporates and leverage on the relationships to better manage and control their credit exposures. He said banking institutions should reinforce these initiatives with capacity building among the SMEs clients.


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