SME support vital – BoZ

BoZ Building.

BANK of Zambia says there is need to create a strong small and medium-scale entrepreneurs (SMEs) sector to accelerate industrial growth.
BoZ deputy governor Bwalya Ng’andu said currently the country is over-dependent on imports of consumption goods and the only major export earner is copper but a strong SME sector can change all this through an enhanced capacity to produce more goods domestically.
Dr Ng’andu said at the Standard Chartered Bank SMEs training workshop yesterday that the sector can also reduce imports as well as enable the country to penetrate the external consumer market.
“If we focus, for a moment, on some of the structural problems that currently characterise our economy, the SME sector is not strong. Zambia can find medium to long-term solutions required to build an equally robust self-sustaining economy,” he said.
He, however, called on commercial banks to understand the SME sector in its totality so that they can come up with credit offerings which are conducive to the growth of the sector.
Dr Ng’andu said the relationship between commercial banks and SMEs is a difficult one because banks regard the sector as a high risk one and are cautious in offering credit while entrepreneurs think that banks are unsupportive to their businesses.
“Commercial banks in this country should become more deeply engaged with SME sector in providing and making available to the sector various descriptions of financial services and products,” he said.
Earlier, Standard Chartered Bank chief executive officer Andrew Okai said the bank supports over 8,000 SMEs in Zambia because when entrepreneurs succeed the economy also thrives.
Mr Okai said Standard Chartered will continue to support SMEs through capacity building in finance, planning and management.

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