GOVERNMENT is in the process of formalising the operations of Small to Medium Enterprises (SMEs) in line with recommendations by the World Bank, SME minister Sithembiso Nyoni has said.
The government is losing substantial amounts of money to the untapped informal market.
The need for revenue for government coffers is more acute at a time the tax base is shrinking as companies either downsize staff or close shop altogether with more people likely to join the informal sector as a result.
“One of the things we are working on is deinformalisation” Nyoni told businessdigest.
“On April the 28th we formalised 118 SMEs covering the areas of Harare, Mashonaland West, Mashonaland Central and Mashonaland East.”
She revealed that on May 30 her ministry will be formalising another 120 SMEs covering the areas of Manicaland, Matabeleland North, Matabeleland South and Bulawayo.
She said SMEs were now using mobile technology to bank their money mainly NetOne’s One Wallet and Econet’s Ecocash facilities. She bemoaned the lack of incentives for SMEs from the banking sector.
“What the SMEs are finding difficult to live with is the high bank charges without any interest on their money. They want to use banks to make money and not to lose it,” Nyoni said.
She said the proposed establishment of Special Economic Zones was welcome, but said the zones must also benefit SMEs and not just big corporates.
According to an SME survey conducted in 2012, 5, 7 million jobs have been created from 2,8 million small businesses, while 800 000 small business had employed 2,9 million people.