News

News

SMEs: New battleground for banks in Zimbabwe

SMEs: New battleground for banks in Zimbabwe

Banks are venturing into the small-to-medium enterprises (SMEs) sector to get a share of the $7,4 billion estimated to be circulating in the informal sector.

SMEs now constitute the bulk of the informal sector and a 2012 Finscope Survey says the SMEs had an estimated turnover of $7,4 billion circulating within that sector.

The rush into developing strategies to lure SMEs comes as the country is going through a severe liquidity crisis as exports have not performed according to expectations, with imports ballooning. In addition, deposits have been short term in nature and hence cannot be lent on long-term basis.

CABS managing director Simon Hammond said there was a lot of money circulating in the SME sector, which was why the bank “has been working on strategies to tap into this space”.

“We have developed safe and ring-fenced lending and access models for this sector. We have been able to penetrate some pockets where economic activity can be stimulated,” Hammond said.

“In these pockets, we have been able to play our role in a significant way. More work is still underway as we replicate these models in more areas.”

Credit Risk & Scoring