The Sunday News
Nkosilathi Sibanda, Business Correspondent
FINANCIAL institutions have been advised to loosen up barriers for funding requirements in order to assist new business start-ups operated by young people, as the current requirements do not attract innovation and tend to frustrate growth.
There have been wider calls for the industry to accommodate ambitious youth eager to open companies in an economy dominated by entities which have long made a stay and continue to influence and expand their market share. Conditions at play within banks require collateral as a pre-requisite for one to access funding.
But, few among youth own any properties or have money to convince financiers to fund their ideas. Start-ups end up folding or are taken up by big companies, in what has been noted a bottleneck to growth. The youth, between the ages of 24-35, account for 46 percent of the population according to the Zimbabwe Statistics Agency (ZimStat).
Mr Nick Nkomo, a young entrepreneur, told Sunday News Business that he had abandoned his plans to open a bed and breakfast motel at Umzingwane after bank executives “threw away” his proposals.
“Managers at three different banks shook their heads and said I did not qualify,” said 30-year-old Nkomo.
“Besides having been a client for years, the banks could not be convinced by my idea. I had nothing to offer as collateral backup.”
Mr Nkomo said he rents a flat in the Central Business District (CBD) of Bulawayo and entrepreneurs of his age hardly own property except for pre-owned cars whose value is not considered as convincing enough to win a bank’s favour.
A collective of young people with interest in tourism, Youth in Business Tourism met sometime earlier this year and tabled proposals to have the Government talk to banks about the funding difficulty.
“We as young people in the tourism business are in constant appeal to have banks rescind their heavy demands. Besides the collateral, asking for financial backup even for a bankable proposal is a headache. That is why the Youth in Tourism organisation wants to sit down with banks and find out how best we can talk out the issue. Young people need to be assisted,” said Ms Cathrine Mzila, a member of the Youth in Tourism who has struggled to get a loan to kick start her safari tour company.
Zimbabwe Tourism Authority (ZTA) spokesperson Mr Godfrey Koti said it is within their mandate to create an environment where young people take up available opportunities. He said the country follows through the African Union’s Africa Youth Charter to support the participation of youths in Sustainable Development Goals (SDGs).
Mr Sikhawuliso Sibanda, an established travel and tour expert with Silwane Tours implored banks to reconsider their demands if they are serious about funding youth projects.
“We have a challenge on new players in particular youth empowerment in the tourism business. For one to be funded, there’s need for collateral but it’s known that new players such as young people do not have that. Banks and the Government need to look at the issue and promote our youth.
“Encouraging the young to take up businesses not only uplifts them but also gives way to a sustainable future and continuity in the industry,” said Mr Sibanda who is also a regional representative of the Tourism Business Council of Zimbabwe (TBCZ).
The stringent funding regulations in the tourism sector are seen as a disincentive to attract business.
Recently the Minister of Finance and Economic Development Professor Mthuli Ncube availed a $500 million stimulus facility for the tourism sector, to which he advised youth led businesses to apply for bailouts amid the impact of the Covid-19 pandemic.
Prof Ncube, on several occasions also said there are huge incentives for established businesses in the sector that create jobs for young people.
