THE First Factoring Company of Zimbabwe (FFCZ) has introduced a new product designed to enable small to medium-scale enterprises (SMEs) to offer credit facilities to their c
The new product, called instalment discounting, allows SMEs to extend credit facilities without unnecessarily exposing the businesses to the vagaries of the economy.
FFCZ managing director Collen Magurah, said instalment discounting would bolster the capacity of SMEs to do business and empower them to become competitive in the hostile economic climate, which is marked by rising production costs, shortages of fuel and foreign currency and diminishing consumer demand.
“We want to break the monopoly currently enjoyed by established companies, by extending to the SME sector a facility that allows them to offer credit terms to their customers and become competitive in the process,” he said.
Under the facility, the SMEs are required to cede their debtors’ books to FFCZ against which the financial services company would pay up to 80% of the amount owed to the SME operator.
FFCZ would recover its money through debit orders on individual employees that are affected through companies and large organisations like the Salary Service Bureau for the civil service.