The Forum for Democracy and Development has saluted the timely decision taken by the Bank of Zambia to allocate K10 billion to commercial banks and other financial institutions to enable Small and Medium Enterprises to access credit facilities from these institutions at a reduced interest rate.
Party spoke Yotam Mtayachalo says this will revive businesses that have greatly been affected by the effects of the Coronavirus pandemic.
Mr. Mtayachalo has however expressed concern that small businesses, especially in rural areas, have had difficulties in accessing credit facilities due to a number of challenges among them few or non-availabilities of credible lending institutions and issues of collateral just to mention but a few and stand to lose out a great deal as opposed to their colleagues in urban areas.
He has appealed to financial institutions and the central bank to ensure that these resources are fairly allocated to all districts so that they can be accessed fairly by all deserving beneficiaries because rural-based Small and Medium Enterprises involved in Agro-processing are very critical in job creation and economic emancipation and therefore must be supported if they have to grow into large business undertakings.
Further, Mr. Mtayachalo said financial institutions should also relax stringent conditions attached to acquisitions of these loans especially on issues of collateral because many rural business undertakings do not have title deeds on their properties hence accessing credit facilities remains a tall order or a pipe dream.
He said the government should also come up with a deliberate policy by offering incentives to indigenous financial institutions which also operate in rural areas such as the National Savings and Credit Bank so that many rural-based industries can benefit from credit facilities at reasonable interest rates.
Mr. Mtayachalo said the COVID-19 pandemic undoubtedly continues to inflict a huge toll on human life and the global economy nevertheless it has also provided a window of opportunity for Zambia and Africa at large to seize this opportunity and support Agro-businesses and other homegrown manufacturing industries to boost industrial development.