SMEs: Engine of growth
Published On December 21, 2022 » 2159 Views» By Times Reporter » Business, Columns
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•Government should work with the private sector to devise mechanisms that promote growth in the SME sector.

By Kennedy Mupeseni –

DESPITE conflicting figures on the contribution of the Small and Medium Enterprises (SMEs) to the country’s Gross Domestic Product (GDP), the sector remains the biggest contributor.
Available data indicates that the sector contributes in the region of 70 to 80 per cent to the GDP and more than 80 per cent to job numbers in the country.
In the face of this, the sector is faced with a myriad of challenges ranging from limited access to capital, lack of financial awareness and limited skill set among others.
Hence, measures should be taken to harness the economic potential of the SMEs to make the country’s more resilient to external economic shocks.
Government should work with the private sector to devise mechanisms that promote growth in the SME sector.
In this vein, interventions like the one crafted by Atlas Mara Bank, Zambia’s SME business club will provide practical business advice to SME customers to address capacity-building shortages for small and medium-sized businesses in the country.
The bank will also provide SME enterprises with opportunities to network, source markets, and receive assistance in developing competent business capacity.
As part of the business club, SMEs belonging to the club will have an opportunity to interact with carefully selected partners that will add value to their businesses.
The partners that have been lined up will, among other things, offer services such as human capital development, business advisory, and incentives for innovation, platforms for financing, etc.
Atlas Mara said the bank’s interventions like the creation of the SME business club will position more SMEs for growth.
Head of Business Banking and SMEs Robison Daka said at the first SME Business Club workshop in Kitwe last week that capacity building is critical in unlocking the SMEs’ potential.
“Atlas Mara Bank is constantly working to enhance financial inclusion opportunities in the country through various programmes such as the SME business club,” he says.
Mr Daka says the bank has come a long way with traditional banking systems, which are now giving way to the development of innovative digital platforms that benefit its customers, such as the new SME customer value proposition, the first-ever SME application on the Zambian market.
It took Atlas Mara two years to come up with the proposition after visiting all 10 provinces and holding focus group discussions with SMEs.
Besides that, the bank had also done comprehensive research to fully understand the SME ecosystem and its needs.
“The need for advisory and capacity development services has been answered through the Atlas Mara Business Club. The business club will provide practical business advice to SME customers in order to address capacity-building shortages for small and medium-sized businesses,” Mr Daka adds.
The bank will also provide SME enterprises with opportunities to network, source markets, and receive assistance in developing competent business capacity through the business club.
“The partners that have been lined up will, among other things, offer services such as human capital development, business advisory, and incentives for innovation and platforms for financing among others,” Mr Daka says.
On the other hand, the SME proposition will address some of the financing needs of SMEs such as limited security that most SMEs find themselves in by arrangements with partners that are able to provide cover of up to 70 per cent if the SME meets all the criteria which answer to a viable business undertaking.
The bank is also developing a scorecard to ensure that the turnaround time for processing these facilities will be shorter and meet the urgent needs of finance for SMEs to do their business.
Atlas Mara recognizes the government’s role in creating an environment that encourages a varied and inclusive economy, such as the government’s strategy for public-private partnership dialogue (PPD).
The bank states that it is also arriving at the fact that it can only thrive if the rest of the economy thrives.
Head of procurement Chipungu Dzekedzeke in her presentation urged SMEs to team up in order to satisfy tender conditions.
“Many SMEs lack knowledge on bidding processes while lacking financial capacity to effectively participate in tendering ,the solution where capacity is lacking is by teaming up and coming up with bankable bids ,”Ms Dzekedzeke says.
She says as part of the SMEs capacity building, Atlas Mara under the SME business club will be on hand to help them with the required information on handling tender processes.
The Patent and Company Registration Agency (PACRA) and the Zambia Revenue Authority (ZRA) had representation at the inaugural workshop .
PACRA regional manager –Copperbelt Lameck Mwenya whose presentation encompassed diverse functions of PACRA from business registration to annual return issues, says low registration of innovation is a source of concern for the agency.
He says SMEs should be encouraged to register their innovations because it is critical in enhancing economic growth of the country.
“Logos and labels as well as the actual innovative business ideas that separate a company or product from others need to be registered or patented to gain value,” Mr Mwenya says.
He says pushing more businesses from informal to formal sectors will not only boost Government’s revenue but increase exposure to formal financing and other business opportunities.
There are a lot of benefits of registering businesses compared to operating as informal.
Mr Mwenya encourages SMEs to register businesses and innovations to gain more financial and business exposure.
He debunked myths that councils also register businesses but that councils only issue trading licenses adding that PACRA was the only one in charge of registering businesses.
As for ZRA senior tax consultant Adrian Saluti, SMEs should take advantage of the ongoing tax interest and penalty amnesty to be up to date with the tax collector.
Mr Saluti says ZRA would like to see a vibrant SME sector to broaden the tax base.
“Every development the Government undertakes comes as a result of tax and non tax revenue hence the need for everyone to take part in making tax contributions and one way of making that possible is by formalizing businesses through business registration ,” he explains.
Mr Saluti advises that SMEs should take advantage of the ongoing tax interest and penalty amnesty to normalize their books before the window period of up to the end of March next year elapses.
With more stakeholders’ involvement in bettering the working environment for SMEs in the country, the sector which ranks tops in terms of economic contributions will be a force to reckon with.

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