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.
