Ndola Chamber of Commerce blames poor access to finance for low growth of SMEs

Ndola District Chamber of Commerce and Industry (NDCCI) president, Joseph Malisawa, has named limited access to finance as some of many hindrance to Small and Medium Enterprises (SMEs).

Malisawa observed in an interview with Zambia Monitor in Kitwe on Saturday that while SMEs contribution to jobs was around 88 per cent, access to finance among the the segment was a meagre eight percent.

“The SME sector cannot grow with low access to financing. Banks shun lending to the SME sector, only 8.3 percent of SMEs have exposure to financing despite employing 88 percent of the country’s total labour force. Something needs to be done to improve exposure to financing, ” he said.

Malisawa said there were too much restrictions in terms of access to capital for the segment adding most of the SMEs fell to meet collateral conditions hence failing to get loans.

He said as result SME sector contribution to the country’s Gross Domestic Product (GDP ) had been around three percent over the years .

Malisawa said high interest rates were also some of the hurdles faced by the SME sector in terms of exposure to financing opportunities in the country.

He said while the debt restructuring would unlock financing and other economic opportunities, the rigid nature of the banking sector in providing funds to the SMEs if not changed would continue hampering access of funds .

WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.