Small and Medium Enterprises Minister, Elias Mubanga told parliament yesterday that the government has concluded engagement with commercial banks to create products that are tailored for SMEs, adding that banks will now not demand for collateral on loan amounts below K20, 000.
He said the agreement will provide for the government to recommend SMEs that are ready to access financing services from the banks.
Mr Mubanga disclosed that to this effect, Indo-Zambia Bank has already offloaded K500 million on the market which SMEs are free to access.
The minister said he is visiting the provinces to explain to the SMEs on how these funds can be accessed.
He also explained that a major challenge facing SMEs in accessing financial support from commercial banks is lack of business skills and therefore the agreement will enable government and banks to equip SMEs with the required skills.
Mr Mubanga added that through Technical Education, Vocational and Entrepreneurship Training Authority, the government has developed programmes that will enable TEVET institutions to introduce business skills in all courses and link the graduates to empowerment programmes.
He also said the new dawn administration will also enhance the capacity of the Citizen Economic Empowerment Commission to enable it to perform programmes that support SMEs’ growth.
Mr Mubanga said the government has also improved the allocation to the empowerment fund to K350 million in the 2022 national budget from K4 million in the last budget.
He said the Citizen Economic Empowerment Commission Act will be reviewed to identify weaknesses that hinder empowerment of SMEs.