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Minister Nyoni

Mutare Bureau
GOVERNMENT has allocated $2,2 million to fund small and medium enterprises operating in the rural areas in Manicaland under the national poverty alleviation project.

Officially launching the fund in Mutare yesterday, Small and Medium Enterprises and Cooperative Development Minister Sithembiso Nyoni, said the fund was meant to strengthen existing businesses.

She said small businesses were failing to access funds from the financial sector because most of them do not have collateral.

“SMEs and cooperatives are particularly constrained by gaps in the financial system such as high administrative costs, high collateral requirements in accessing funding,” she said.

“On the other hand, banks readily attribute risk aversion stance for not lending to SMEs to demand-side constraints, which include lack of managerial capacity, inadequate collateral and poor record keeping, among others.”

The poverty alleviation project, she said, would support commercial livestock rearing projects, savings and credit cooperative society support.

It will also result in the establishment of an entrepreneurship training institute in Manicaland.

“The project will be implemented for the period of four years. Three provinces, Manicaland, Masvingo and Matabeleland North will benefit from the loan,” she said.

Beneficiaries of the loan facility will be chosen basing on competitiveness and viability of their project proposals.

“Projects that will have ripple effects in alleviating poverty in the community will be given utmost priority. The funds will be disbursed directly to beneficiaries’ suppliers only.

“In this regard, it is critical for Manicaland SMEs and cooperatives to strive and make sure that they have attractive business proposals and financial management records as well as modern technologies and positive zeal to doing business for the project to achieve its intended objectives.”

Cde Nyoni said Government was aware of the critical role SMEs play in poverty alleviation, job creation and income generation.

“That is why my ministry successfully lobbied for the $7,6 million fund for the rural projects. You will also concur with me that poverty is most widespread in Manicaland with 70 percent of people living in abject poverty as revealed in a recently launched Zimbabwe Atlas of Poverty released by the Zimbabwe National Statistics Agency.

“Given the current and potential contributions that SMEs and cooperatives can make to the Zimbabwean economy in general and your province in particular, it is important that we provide them with the necessary tools to ensure that they grow into sustainable entities that can further provide more employment and address economic inequalities in our societies,” she said.

Minister of State for Manicaland Provincial Affairs Mandi Chimene, expressed confidence that businesses in the province will rise to the occasion and make good use of the funds.

She said her office and relevant Government departments will closely monitor the implementation of the project and ensure that beneficiaries are up to the task.