Limited access to affordable credit, inadequate collateral and weak financial management remain barriers to small business growth in Zimbabwe and across the Common Market for Eastern and Southern Africa (COMESA), industry representatives said at the 19th COMESA Business Forum in Harare, today.
The challenge was highlighted at the 19th COMESA Business Forum in Harare, on Tuesday, during a session titled Closing the SME Finance Gap: Capital at Scale, where representatives from financial institutions, and business organisations called for stronger lending mechanisms, improved business preparedness and greater cross-border investment to unlock funding for small and medium-sized enterprises (SMEs).
Daniel Pinto Khamula of FDH Bank Malawi said capital was available in his country but businesses needed viable projects and stronger management capacity to attract investment.
“From a financial sector perspective, we can confidently say capital is available but the proposal or projects need to be bankable,” Khamula said.
His remarks reflect a challenge facing many Zimbabwean SMEs, which often struggle to meet lenders’ requirements because of inadequate collateral, limited financial records and gaps in business management skills.
In Zimbabwe, SME loans accounted for 7.53% of total banking loans as of December 2024, according to the National Competitiveness Commission’s 2024 Zimbabwe Competitiveness Report, highlighting the limited reach of formal bank financing to smaller businesses.
Digital lending was identified as another avenue for expanding access to finance, particularly for businesses underserved by traditional banking services.
Innocent Kawooya of Uganda-based HiPipo urged lenders to build confidence in small enterprises and expand digital financing.
“Digital lending is crucial to grow small businesses. Give us your trust and have confidence in small businesses. They are key to reducing poverty and creating wealth in our region,” Kawooya said.
For Zimbabwean businesses, digital lending could provide alternative sources of working capital, although affordability and responsible lending remain important considerations.
Participants also called for stronger links between banks and private-sector players across COMESA member states to facilitate investment beyond national borders.
The third vice-president of the COMESA Business Council, representing the Djibouti Chamber of Commerce, said regional cooperation could help connect small businesses with financing opportunities in other member states.
“The region needs to link the private sector and banks in finance in the different Member States to invest in small businesses in other COMESA countries. Through the CBC, this can be facilitated,” the representative said.
Such links could help Zimbabwean SMEs access regional investors, expand into new markets and participate in cross-border supply chains.
Representatives from different countries and organisations including Coca-Cola, ATIDI, FDH Bank, HiPipo, the Djibouti Chamber of Commerce and ZSE Holdings participated in the discussions.
