In Zimbabwe there are many institutions that are available to support the development of small business and they include government and commercial banks. Small businesses refers to those businesses that are independently owned , operated and organised for profits and is not dominant in its field.
The government as a way of supporting small business in terms of finance is offering general incentives through the general incentive policy .This programme is available to local and foreign small firms investing in land, buildings, plant and equipment to encourage small and medium sized manufacturing and to facilitate increased employment creation. Another support service which is being offered by the government is business loans through commercialbanks such as CBZ and CABS. This scheme is available to businesses that meet the financial institutions criteria. The aim of the scheme is to provide business loans or lending to the small businesses. Another scheme which aims to provide initial capital to new organizations to initiate their portfolio and to fund operational expenses over a predetermined period is seed loans.
Most of the assistance for capital projects is administered by Industrial development cooperation (IDC). The cooperation provide among other things, legal services, registration of newcoys, research for new opportunities, building of factory shells, audit services and policy direction. The banking sector has also been deregulated and banking regulations are continuously being reviewed to encourage greater competition in the financial sector. Interest rates are market-determined.
Training schemes for small business development in Zimbabwe include the integrated facility at Indo-Zim Technology centre (IZTC) has a Technical Training Centre (TTC) linked to a small and medium enterprises ( SMEs). The IZTC is set up at the Harare Institute of Technology in Belvedere, Harare. Indian assistance to IZTC is summarized as Precision high technology machines, measuring instruments for training and manufacturing of Tools and dyes. Precision CNC machines for imparting training and to serve as Common Facility for SMEs.
The modern equipment in the areas of Carpentry, Sheet Metal Welding and Fabrication and Machine Shop has been supplied to SMEs for use by Common Facility Centre set up by SEDCO and modernizing other vocational training centre at various parts of Zimbabwe. Equipment for training on manufacturing of Printed Circuit Boards (PCB).Seminars, Conferencesand Courses in entrepreneur Development and General Management areas are also provided by Indian Experts in Zimbabwe. In terms of access to information there are policies that include Government of Zimbabwe's Information and Technology and Internet policy The policy is an integrated legal and institutional framework that provides strategic direction and guidance for sustainable national development through the use of ICTs (Information and Communication Technology).
The National ICT Policy Framework provides for, among other things, the establishment of national information and communication technology authority, national information and communication technology converged regulator and e-government. E-government agency will develop, promote and coordinate the use of Information and Communication Technologies (ICTs) in government for the exchange of information and delivery of services. National ICT regulate the development of communications networks and facilities. It deals with issues of licensing, charges and tariffs, standards and consumer protection. National ICT authority offer advice to Government on national ICT requirements and policy matters, and coordinate accelerated development of ICTs in the country. Furthermore, small businesses have also benefited from business and industry networks.
This is whereby businesses in the same industry or trade come together for a forum and discuss about the industry .Through such forums the small businesses benefit from such networks because there will be an intersharing of skill and knowledge and hence they will be able to equip themselves from such kind of forums. For example most of the small businesses in the tourism sector benefited from the Sanganai /Shanganani tourism forum that is being held last year (2012).Therefore business in the same trade should meet up and have forum about the industry and be able to equip small businesses with skill and knowledge.
a)The provision of business development services to small business in Zimbabwe is consisted of many gaps and overlaps that are as explained below There are gaps in financing of small businesses since this provision is not yet fully done as expected. Generally many small businesses have no access to this service because they lack assets to pledge as collateral security hence only a few benefitted in the provision of finance services by the government through commercial banks. Commercial banks are also reluctant to provide seed loans and other financial services to small businesses.
High interests rates by commercial banks are also widening the gap for small business to access finance services offered by commercial banks. In this cases the cost of borrowing is very high up to 30% per annum hence the majority of small business can not afford these rates. More so, corruption is widening the gap for small business to access loan from commercial banks. In this case there is nepotism whereby a certain small business can only access loans on the grounds of how strong is their relationship with the workers in the bank.
This scheme is not also publicised hence the majority of small business are not aware of them. There is also a gap in the provision of training services offered by the institutional support services since not all of the small businesses acquired the training services. In this case the training services were offered at high prices hence only a few who can afford benefited.
These training services were also not made known to the public especially those in rural areas who do not have access to information hence there is still a wide gap in providing this service to develop small businesses. In terms of technology, the existing institutions have failed provide informational and technology services to small businesses in Zimbabwe ,this has been so because these institutions have face some financial constraints in importing the new technology that is now available and being employed by other institutions in foreign countries.
This makes it even a big drawback to access loans from banks because they lack collateral. Such institutions would have been expected to support small business with the information technology services to them. For instance Zim College in Bulawayo has failed to adopt to new technology due to financial problems and this college has been offering information technology to small businesses like Cheff Jiff restuarants, Hence this has made the college not being able to upgrade its information technology systems.
Moving on, small businesses are also failing from being included in the business and industry networks, this has been so because SMEs have being stereotyped as business with lack of knowledge and skill in the industry .For example if retailers in the same retailing industry may decide to exclude small retailers because of their lack of knowledge for instance if OK supermarket, TM supermarket,DCk and Spar were to go for a business forum ,small retailers will be excluded because they believe that small business has lack of knowledge has he will not partake in the forum. In a nutshell ,in view of the above information there are many gaps and overlaps in the provision of business development services to small business in Zimbabwe and a corrective measure or step need to be taken inorder to correct these gaps and overlaps such that there will be favourable environment for small businesses to operate efficiently
MIDLANDS STATE UNIVERSITY
FACULTY OF COMMERCE
DEPARTMENT OF RETAIL MANAGEMENT
Name Reg Phineas Makuyana R122855T Praise Mahungu R122546F Victor Chiromo R122963X Gladingstone Chidakwa R122983X Tafara Zengeni R113875T Sylvester Ndoro R121393Y Forgiveness Muzondo R112494Z Blessing Ngorima R121671C Mode of entry Conventional Qsn: Discuss the existing institutional support services for small businesses in Zimbabwe in terms of a) finance b) training c) technology d)access to information e)business and industry networks
b) What are the gaps and overlaps in the provision of business development services to small businesses
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