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Ease collateral demands on SMEs – Mutati

THERE must be flexibility from the banks in terms of arrangement for collateral when giving SMES loans from the stimulus package provided by government because they are stressed with effects of COVID -19, former Minister of Finance Felix Mutati has said.
Mr Mutati said there was need to ensure that SMEs were given a breath because things were not well with them.
He said in an interview yesterday, during this period when the SMEs were financially stressed , conditions to get the loans must be flexible.
Mr Mutati said banks should not put more burdens on the stressed sector because they would not contribute to the economy as expected.
He said the government wanted the sector to be stable and that it was prudent that the banks put in place conditions which were fair enough.
“It is a very welcome preposition to help the Small and Medium Enterprises but what remains unclear is on the terms and conditions under this money will be provided.
“What is more important is the collateral that will be asked of the SMEs because this will be big intimidation if they have to access to loans.
“So you have this money in the pot then you give me this condition particularly collateral and you can’t fulfil your collateral so it doesn’t matter how much you have put in.
He appealed for flexibility in terms of the collateral arrangement particularly from the SMEs business which was already stressed.
“These people have already given their houses and the majority has nothing to offer, so the business survival for private sector is the instrument used for collateral,” Mr Mutati said

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