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Government says the proposed establishment of a Small and Medium Enterprises (SME) micro credit bank will address challenges faced by SMEs in accessing finances.
Commerce, Trade and Industry Deputy Minister Miles Sampa says this financing initiative is important for the development of a vibrant and dynamic SME sector.
Mr Sampa said the financing initiative will not only address the traditional barriers of access to finance due to lack of collateral but will also address business management faced by SMEs.
He said the SME Credit Bank will address business management through integration of tailor made business development support services such as financial management, marketing facilitation and insurance.
Mr Sampa said the other aspect worth noting is that the financing initiative is innovative in itself in that SMEs will be offered not only credit facilities and business development support services but also an opportunity to own shares in the bank.
The Commerce Deputy Minister was speaking in Lusaka today when he officially opened the national consultative meeting on the establishment of the first countrywide Medium and Small Micro Enterprises credit bank.
Mr Sampa said government has also put in place a number of initiatives to facilitate SMEs access to finance among the establishment of a collateral registry aimed at enabling SMEs to use their property as collateral against borrowing.
He further said government through the Ministry of Commerce signed an agreement with China Development Bank Corporation where the bank will extend a financing facility to SMEs.
And Zambia Tool Kit Project Coordinator Edwin Zulu said the establishment of the SME Credit Bank will not provide competition for the existing commercial banks.
Mr Zulu said to the contrary the SMEs Credit Bank will assist commercial banks to reach out to their SME clients.
Meanwhile, SMEs Credit Bank Programme Initiator Franklin Membe said the establishment of the proposed SME credit bank will create an estimated 100, 000 direct jobs in the first two years of its operations.
Mr Membe said an additional 300, 000 indirect jobs are also expected to be created during the same period.
