RESERVE Bank of Zimbabwe (RBZ) subsidiary Homelink has availed a $1,5 million loan facility to small to medium enterprises as part of efforts to improve small scale businesses. The funding is coming at a time when local SMEs are grappling with financing and technical challenges as well as lack of markets.
Independent estimates suggest that the SME sector employs 60 percent of the population and contributes 50 percent of the Gross Domestic Product. Homelink Finance Services managing director Mr Desmond Ali told The Herald Business that the financial institution provides affordable mortgages and short term financing solutions to members of the public and civil service employees.
“The Small to medium Enterprises Development Corporation (SMEDCO) was availed a loan facility of $1,5 million through Homelink Finance for onward lending to various SMEs and this will run for a period of 36 months. The facility presents other opportunities for Homelink Finance Services to support indigenous small scale businesses, in line with Government’s mandate of poverty alleviation and Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset),”said Mr Ali.
Homelink was instrumental in the launching of $15 million Cross Border Traders and SME facility.
“We have realized the significant role played by cross borders and SMEs in the economy and have thus launched a $15 million fund. The fund is aimed at unlocking and promoting financial inclusion, exports, SMEs and single holder organisations. Homelink has gone further by providing working capital credit and banking services to Cross Border traders and micro producers. A low interest rate of 1 percent per month is charged under this facility, with loan tenures ranging between 14 and 90 days,” he said.
The facility has also provided micro-export finance with payments being directed to suppliers against quoted invoices where applicable. Recently Homelink in partnership with Harare Institute of Technology (HIT) gave eight groups of women entrepreneurs an amount in excess of $500 000 to further their businesses.
As part of the deal, HIT will provide technical and training support for the women in business. The fund will be paid up to three months of starting a business.