ZBIN covers 6 countries in Southern Africa namely Zimbabwe, Zambia, Malawi, Namibia, Botswana and South Africa. Our posts mainly target nationals from those 6 countries and we also include the Diaspora. We have 2 business groups under the ZBIN umbrella for South Africans and Malawians, in future we hope to cover Namibia, Zambia and Botswana.

We continue with our vision Towards a Diaspora Strategy where we hope that governments in Southern Africa will appreciate the importance of the Diaspora community and develop strategies for engagement with this important community.

We start with a few highlights from the World Bank MIGRATION AND REMITTANCES FACTBOOK 2016 THIRD EDITION BOOK

1. More than 247 million people, or 3.4 percent of the world population, live outside their countries of birth. Although the number of international migrants rose from 175 million in 2000 to more than 247 million in 2013 and will surpass 251 million in 2015, the share of migrants has remained just above three percent (of world population) for the last fifteen years.
2. The top migrant destination country is the United States, followed by Saudi Arabia, Germany, the Russian Federation, the United Arab Emirates, the United Kingdom, France, Canada, Spain, and Australia. The top six immigration countries, relative to population, are outside the high-income OECD countries: Qatar (91 percent), United Arab Emirates (88 percent), Kuwait (72 percent), Jordan (56 percent), and Bahrain (54 percent).
3. In 2015, worldwide remittance flows are estimated to have exceeded $601 billion. Of that amount, developing countries are estimated to receive about $441 billion, nearly three times the amount of official development assistance. The true size of remittances, including unrecorded flows through formal and informal channels, is believed to be significantly large.
4. The cost of remittances is the highest in Sub-Saharan Africa and in the Pacific Island countries (for example, it costs more than 20 percent to send $200 from Australia to Vanuatu, and 19 percent from South Africa to Zambia). As of the third quarter of 2015, the average cost worldwide remained close to 8 percent—far above the 3 percent target set in the Sustainable Development Goals.

Below we look closely at micro finance involvement in the diaspora remittance sector. This is a key missing link especially when one looks at Zimbabwe where close to a US $1 billion was remitted in 2016. The figure can double or triple if an enabling environment is in place to encourage investment by the Diaspora. We encourage Researchers and Policy Makers to look closely at the organisation called Kiva and the link with micro finance institutions.

Give a man a fish, he’ll eat for a day. Give a woman microcredit, she, her husband, her children and her extended family will eat for a lifetime.’ Bono

According to Johnson and Sedaca many experts feel that increasing the involvement of credit unions and microfinance institutions (MFIs) in the remittance transfer process is a promising means to expand financial access to the poor, particularly in rural areas with no access to the larger commercial banks. Microcredit and microfinance are relatively new terms in the field of development, first coming to prominence in the 1970s and they are recognized as effective tools to alleviate poverty. ‘Broadly speaking, microfinance for loans (i.e., microcredit) is the provision of small-scale financial services to people who lack access to traditional banking services. The term microfinance usually implies very small loans to low-income clients for self-employment,

There are said to be at least nine traditional features of microfinance:

1 Small transactions and minimum balances (whether loans, savings, or insurance)

2 Loans for entrepreneurial activity

3 Collateral-free loans

4 Group lending

5 Target poor clients

6 Target female clients

7 Simple application processes

8 Provision of services in underserved communities

9 Market-level interest rates.

It is reported that microfinance institutions are increasingly looking to diasporas as a source of funding for small enterprises. To that end, the World Diaspora Fund (WDF) was launched in 2010 and it is an initiative of the Working Group of the International Migrants Remittances Observatory for Least Developed Countries in partnership with several public and private organizations. The WDF is intended to offer migrants a secure investment vehicle (microcredit organizations) that will contribute to the development of their countries of origin.

The WDF will invest through loans, guarantees, or even taking stakes in microfinance institutions in the South. The Fund will also participate in financing infrastructure identified by the migrants. The Fund will invest through guarantees, loans and equity in microfinance institutions that are regulated and sustainable. It will also participate to the co-financing of infrastructures proposed by the migrants. Furthermore, organizations such as Kiva.org provide a channel through which diaspora members can provide microfinance to the homeland. Kiva is a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world. Kiva works with microfinance institutions on five continents to provide loans to people without access to traditional banking systems. One hundred percent of the loan is sent to these microfinance institutions, which Kiva call Field Partners, who administer the loans in the field. Since Kiva was founded in 2005 it has made $203 million in loans through 568,876 Kiva lenders with a 98.65% repayment rate.

‘If you look at Kiva.org, people with a very modest amount of money can make a huge positive impact all around the world. There are so many people who want to give but don’t really know how to do it. Through Kiva.org, people around the world can become micro-bankers to developing world entrepreneurs, who have their own ideas, so we can give them a chance to raise their kids with dignity, send their kids to school, and in troubled places like Afghanistan we can marginally increase the chance that peace can prevail, because people will see there is a positive alternative to conflict.’ Bill Clinton, 42nd President of the United States

During our last preparatory meeting for the business tour to Mozambique, I suggested the need to link up with Human Resources Consultancy in Mozambique. What was the response from ZBIN members? ‘Munemo haurevesi, toshanda muZimbabwe, woda kuti tinoshanda futi ku Mozambique?’That was an interesting response from the community-in short most people now want to be entrepreneurs and are no longer content with being employed. We have a lot of people who want to be their own bosses, excellent attitude from our members!

ZBIN has been posting a number of articles per week to help members with free information. Expect more information in the coming months, we hope to improve the quality of information shared because we have been sharing basic information which may not be useful in investment decision making. In future we hope to recruit talented interns from the fields of Accounting, Statistics, Finance and Economics. They will be able to provide quality data on investment needs and developments in the country.

Top Needs of the Small to Medium Scale Enterprises

Before we give you information on top needs of the SMEs sector its important to establish or define who exactly is involved in this sector. The first group is made up of folks who are employed 100% in the sector, those who are on the ground running own business enterprises. The second group is made up of part-timers, those in formal employment but with side businesses that they operate to supplement their incomes. The third group is made up of Diasporans who partner with relatives and friends back home in running business ventures.

So what are the current top needs of this sector? Information: We can lump all the needs of the sector into information-lack of information in terms of all the factors listed below. If one has information then they are empowered to make the correct decisions, guess work is often costly as you can invest in a field in decline or a field facing a possible ban. A recent case in mind is that of Zvihuta, some took loans to invest in the project which was banned a few weeks later. Allow me to break down the information needs below.

1.Capital Needs: This is the major stumbling block in the sector. Access to capital such as bank loans. Not enough information is available to existing and new entrants

2.Marketing: Access to markets is also a big issue in the sector, most people can produce high quality products but the biggest challenge is how to access markets. Information on markets availability is a big challenge.

3.Registration: Few SMES are registered formally with the biggest challenge being the cost of registration. One can also add lack of knowledge of the benefits of registration

4.Access to Exports: Few SMEs are active in the exports market with most of them concentrating on the local market. There is lack of information on the benefits of exporting goods.

5.Foreign Currency: Foreign currency availability is proving to be a challenge in 2017 for most companies, the SMEs is not spared

These are our top 5 challenges in 2017 so what opportunities are presented by these challenges? The challenge on Access to Capital creates opportunities for the Diaspora to partner with locals in business ventures. We have previously written about Diaspora Bonds and provided a couple of case studies from Israel, Jamaica and India on how to raise funds from the Diaspora for effective partnerships.

The Access to Markets Challenge can be solved by SMEs pooling resources together and forming big associations or companies like what ZBIN Poultry is doing. Please read our latest article on Poultry. We also have room for Marketing Consultants to enter this field because we seem not to have certified SME Marketing Consultants, we have no brand names in this field targeting the SMEs.

Registration: A few weeks ago I wrote about the benefits of registering companies. This is the message that has been missing as all consultants helping in the registration of companies have been missing the key information-What companies stand to benefit by registering formally. The other issue is other issue is the cost of registering companies which are prohibitive. So opportunities exist for new entrants who register companies at competitive rates, new entrants who can market the benefits of registration effectively so as to attract clients. The Government also has a hand to play in encouraging the SME sector to register, the Government will benefit from improved revenue as the registered companies will be required to pay tax. Before encouraging the SMEs to pay taxes, engage them and reduce the cost of company registration.

Access to Exports: The Reserve Bank should be applauded for introducing an Export Incentive. More should be done though to encourage the SME to export goods and services. ZIMTRADE will be presenting a market survey report conducted in the Democratic Republic of Congo, good move but more should be done to make these market survey reports available, free of charge to all SMEs. We recommend the establishment of an SME department within ZIMTRADE to spearhead export drive by this sector.

Foreign Currency Availability: This is likely to remain a challenge in the short to medium scale. Opportunities that exist include those already mentioned such as exports drive and diaspora engagement. There is also room for use of innovative platforms such as crowdfunding and peer to peer money transfers.

So there you are good folks, opportunities abound in this sector for you as a Consultant to help this important sector that anchors the economy. There is room for entry for a lot of innovative professionals who can tackle capacity building,market researches and company registrations . The Zimbabwe Business Ideas and Network  through this site would like to promote consultants who are willing to write articles that help this important sector.