SMEs, youths get support
By Vimbai Kamoyo
A financial institution that targets to support small to medium businesses, as well as youths, has pledged to support without the traditional collateral security requirements, The BusinessConnect reports.
Speaking at the launch of the SMEs International Expo 2021 theme, the EmpowerBank acting chief executive officer Shadreck Mhembere, who was represented by the bank’s marketing and sales manager, Jabulani Nyakurerwa, said they were pleased with achievements scored by the SMEs and would do much to assist them.
“As EmpowerBank, we are delighted with the great strides that you (SMEs) continue to pursue in your endeavours to help start-up businesses to be part of the mainstream economy. We are particularly excited by the fact that what you seek to achieve resonates well with our mandate as EmpowerBank.
“Our bank is mandated to empower youth and marginalised communities through financial inclusion and financial literacy by offering affordable loans to start-ups. Our interest rates are below market rates, thus giving an opportunity for youth led SMEs to access funding for their different projects.
“As a deposit-taking microfinance institution (DTMFI), we are required by the regulator to safeguard the institution from risks such as credit risk or failure to repay by our clients. However, we are aware that most of the youth-led SMEs do not have the traditional collateral required by private financial institutions. Therefore, we have structured our loans to have some level of flexibility for our target market access funding,” he said.
He said the bank had a wide variety of loan packages, which their clients can apply for.
“I am delighted to note that this launch is happening a week after the official launch of the Youth Business Starter Pack (YBSP) by His Excellency, President of the Republic of Zimbabwe, Cde, Dr, ED Mnangagwa at Tabudirira Vocational Training Centre in Mutoko. This is a typical youth-led project financed by EmpowerBank, thus bridging the financial gap within the marginalised communities.
“The YBSP product is the anchor for capacitating start-up businesses through financial support. Various starter pack products in poultry, tobacco and other categories are in the pipeline and will be rolled out soon. For SMEs, we have loan products such as Sisonke, which allows group lending with group members collectively guaranteeing repayments. This product requires a group constitution; collateral and past project performance for the group or groups that have been in existence.
“We also offer Thuthuka product, which is a product for the SMEs such as vendors, flea market traders as well as cross border traders. The loan is matched with the capacity to repay by the borrowing enterprise. Other products available to the SMEs include SmartMovers, Leasing financing and Order financing.
“Order financing is a funding option that is given to a business or individual requiring financing single or multiple orders by a client. The bank will pay for the order from the supplier and recover the loan from the end customer,” he said.