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Credit guarantee scheme to aid SMEs

CUTS International says the introduction of the Zambia Credit Guarantee Scheme for Small and Medium Entrepreneurs (SMEs) will help the small companies mobilise affordable resources for growth.

In the 2022 National budget, the Minister of Finance Situmbeko Musokotwane proposed the introduction of the Zambia Credit Guarantee Scheme for SMEs, which would provide an avenue for affordable financing for the sector.
This sector was said to be marginalised in accessing finance from traditional sources like the commercial banks.
CUTS International board member Sajeev Nair said in an interview recently that the Credit Guarantee Scheme would assist the SME mobilise resources for expansion as well as operations.
“The pronouncement in the budget by the Minister of Finance is positive in the sense that now the SMEs would be able to mobilise their resources for various operations through the Credit Guarantee scheme,” Mr Nair said.
Furthermore, to reduce the cost of doing business for SME’s, the minister announced that Government has reduced licensing fees from K9,000 to K4, 500.
On the Green economy, Mr Nair said the focus given on Green economy as well as innovative finance for climate change such as green bonds and climate fund was positive aspect of the budget.
“We are happy that the Government plans to dismantle domestic arrears that include a lot of SMEs and those monies are mainly owned to small companies where the Government sourced goods and services,” he said.
Mr Nair said this would definitely help SMEs to bounce back and continue with their business especially the small contractors and also supply the goods and services to various public institutions.

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