By Nyaradzai Gogo

For the past five years, Tsitsi Muchena, 32, has operated a small grocery shop in downtown Harare, but the business is not growing.

Like many across Zimbabwe’s mainstream and informal economies, Muchena has seen a steady decline in sales due to reduced consumer spend.

But the major hindrances to growth have been access to funding, poor exposure and limited market access, particularly for small women-run businesses.

“While access to finance remains the biggest challenge for most small to medium scale enterprises (SMEs) several non-financial obstacles were also a huge threat,” said Muchena, a marketing graduate who could not find a job two years after leaving university.

“These include access to markets, business advisory services and support networks, lack of infrastructure, limited leadership and management skills, and poor marketing and growth strategies and financial management.”

With Zimbabwe’s economy gone to the dogs, many people, including university graduates, have found succour in the informal industry, running own small businesses or vending.

The informal sector now employs over 85 percent of Zimbabweans, according to official figures from the state-run Zimbabwe Statistical Agency.

However, the growth in SME numbers have not translated into the actual growth of small businesses.

While the Finance Ministry estimates that there is over USD7 billion circulating in the sector outside the formal banking channels, many struggle to get loans from lenders.

Across the financial industry, many lenders are reluctant to extend credit to SMEs because of lingering concerns over their capacity to repay.

Women SMEs feel the pinch more. “The financial challenges that SMEs women face often manifest themselves, banks should be cognisant of these underlying factors,” Muchena said.

Beyond the traditional scope of banks and micro – finance institutions providing financing and money management solutions to their clients by accepting deposits, advancing loans, investing funds, banks have an important role to play in providing business development service, she said.

“This performance determines whether, for example, SMEs can meet their loan requirements or payments terms. In turn this influences the level of risk the bank assumes by financing an SME especially a female since the business world has been regarded as a male dominated industry and that alone maybe intimidating for women to approach responsible authorities for funding, ’’ Muchena said.

Zimbabwe has a dedicated SME government ministry, but one that is poorly funded. In the 2015 national budget, the ministry was allocated just USD5 million, barely enough to fund a handful of serious medium sized enterprises.