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SMEs Urged To Use Formal Banking Institutions

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By Debra Ndlovu

Gweru, March 30, 2017 – ZIMBABWE’S smaller businesses have been urged to consider using formal banks to deposit their monies as this was best for their growth prospects.

The call was made by Agribank senior economist Alex Bara while addressing guests to a Small to Medium Enterprises (SMEs) awards presentation ceremony at a local lodge earlier this week.

“I am urging all SMEs who have attended this function to use formal banking methods; 25% of the SMEs are not growing because they do not want to use the formal ways of banking money which is to deposit money in the bank,” he said.

Bara went on to encourage SMEs to have good relations with the banks, and also highlighted that the bankers were willing to create good relations with the SMEs.

“If you do not use the formal banking methods, you are disadvantaging yourself because the use for formal banking methods will ensure that your company and products are therefore protecting your business should be priority number one,” he added.

Speaking at the same event, Roseline Moyo, a business woman, acknowledged the importance of formal banking methods.

“Economists have shaded light to us business people, our eyes have been opened to see the right thing. As an SME, I have always thought that formal banking methods were for those who work in the formal sector,” she said.

Zimbabwe’s SMEs often shun local banks for different reasons, the most common being the high bank charges and only recently, the fear of not being able to access their cash due to the prevailing cash shortages countrywide.

Some also fear being put on the taxman’s radar should it turn out they are commercially active entities that have avoided paying tax.

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