© ONLY 15 percent of the country’s three million small medium enterprises (SMEs) are formally registered, Finance minister Mthuli Ncube has said. The Treasury boss said this while speaking at the recent launch of the growth enterprise market (GEM) portal SME Funding and Listing platform which was developed by the Financial Securities Exchange (Finsec), which allows SMEs to apply for equity listing or debt funding through the portal.
Ncube said the SMEs employ almost 75 percent of the total workforce in the country and contributed about 50 percent of Zimbabwe’s GDP.
SMEs also reportedly make up over 70 percent of Zimbabwe Revenue Authority’s (Zimra) database, although only 20 percent contribute to the authority.
“Zimbabwe has over three million SMEs of which only 15 percent are formally registered. However, these SMEs have several challenges which continue to negatively affect their growth, the major one being limited access to ‘patient’ capital raising options,” Ncube said.
Meanwhile, Finsec’s new Gem platform would drive capital and advisory services as well compliance which is a must for SMEs to access financing to buoy the sector.
“SMEs cannot grow from overdraft facilities from financial institutions. This innovation that we have come to launch today is designed to specifically deal with this challenge.
“The launch of the SME funding and listing platform is one way in which the Zimbabwe capital market is demonstrating growth and diversification from focus on large and established corporates to also include SMEs,” Ncube added.
On the government’s part, he highlighted that the $500 million National Venture Capital Fund would be launched in February next year to also promote investments within the SME sector.