THOUSANDS of retrenchees, including those dismissed on notice in 2015, will get business start-up loans from the Small and Medium Enterprises Development Corporation before July 2017.
The National Social Security Authority (Nssa) is underwriting the scheme. Our Harare Bureau understands the Smedco and Nssa boards will next week discuss eligibility criteria, individual loan quantums and repayment arrangements, among other issues.
Information at hand suggests beneficiaries could borrow up to US$3 000 each, payable over a year with interest of around 10 percent. Smedco chief executive Ms Gladys Kanyongo said last week, “We are just finishing up the modalities in collaboration with Nssa. We expect to receive US$5 million for the scheme as was agreed initially, and nothing has changed in that respect.
I will be meeting with Nssa officials on Friday and we will polish up the finer details before the proposals are taken to both the Smedco and Nssa boards for finalisation. Nssa will have to tell us the criteria to use when selecting the beneficiaries.”
Zimbabwe Congress of Trade Unions secretary-general Mr Japhet Moyo welcomed the initiative. The scheme was mooted in 2016 after over 10 000 employees were fired on notice in the preceding year. Nssa then availed US$5 million to Smedco for onward lending to retrenchees under a three-year facility. The loans will fund bankable projects to start small businesses. This arrangement is likely to be similar to one introduced in 2011 when loans of between US$500 and US$5 000 were disbursed at 10 percent interest.
Government is working on another initiative to assist its workers who might be affected by a staff rationalisation exercise.
Smedco is a Government-owned institution that promotes development of micro, small and medium-sized enterprises and co-operatives.