The Sunday News
Noble Ncube, Business Reporter
THE Centre for Inclusive Finance (CIF) has opened its doors to small and medium enterprises (SMEs) to engage mainly in advisory services, capacity building, research, advocacy, dissemination of international best practices and financial literacy to prepare them for national financial inclusion.
As a result of the recently announced National Financial Inclusion Strategy (NFIS) by the Reserve Bank of Zimbabwe, the company said it was targeting the SMEs sector because of its vast number of informal traders.
CFI executive director Mr Tafadzwanashe Zinyoro said his company was being driven by the ambition to achieve 90 percent national financial inclusion in five years.
He said CFI was seeking to increase the overall level of access to affordable and appropriate formal financial services within the country from 69 percent in 2014 to at least 90 percent by 2020.
“We are inviting SMEs to come and work with us because we believe a majority of them are failing to expand their businesses even if they are doing well. We also want to get them ready for executing of the NFIS initiative. Our organisation is registered as a non-profit making organisation for the sole purpose of making financial markets more inclusive,’’ he said.
“The informal sector is holding a lot of cash in their hands. As a result we want to cover gaps that still exist in the level of access, usage and quality of financial products and services. We also want to help informal traders to use their hard earned cash wisely in relation to helping them grow.”
Mr Zinyoro said CIF will act as a market facilitator in inclusive financial markets by offering a wide range of services designed to meet the needs of low-income market players and their members.
“Our organisation works with both public and private players who have the shared vision of promoting financial inclusion,” he said.
Bankers Association of Zimbabwe advocacy officer Mr Clive Mphambela said it was important to have an appropriate, flexible, risk-based Know Your Customer regime for the SME sector that takes into account the nature of the small businesses and their needs.
“For many economists, the seemingly discordant figures told a story of an economy that has become highly informal in structure and that Zimbabwe has in fact, developed a significant grey or unrecorded economy. One just has to see the level of financial activity at Road Port, the cross border bus terminal, or at the Gulf complex at Market Square.
Huge amounts of money change hands between traders everyday, but where does this money go? While banks need to attract fresh investment capital, to shore up their reserves, the informal sector will also play a big role as banks transform this sector into a significant customer base.
“Informal enterprises must first be encouraged to open and run bank accounts. The owner managers must be endowed with financial skills through financial education and business literacy programmes to strengthen their capacity to run and grow their businesses. The resources of the informal sector, once harnessed into the formal financial system should impact positively on overall liquidity in the economy as the deposit base rises. This, combined with financial history of some good Micro to Small Medium Enterprises (MSMEs) will enable them to access credit from the formal system. There must be a deliberate and clear policy to encourage but not coerce people to use the formal financial system,” said Mr Mphambela.
