Make financial services more accessible to SMEs, says PSF

The Private Sector Federation (PSF) has urged government to help Small and Medium Entrepreneurs (SMEs) access financial services and markets. They also want more investments channeled into the development of physical infrastructure. The federation last week presented a position paper on the recently announced 2015- 2016 national budget to Members of Parliament urging for more emphasis on reducing the cost of doing business for SMEs. “Despite appreciating the amount of resources allocated to thematic areas, we are requesting government to keep investing in the sector for its stability,” Antoine Manzi, PSF’s Director in charge of Advocacy said. “A lot could have been done in the areas of taxation and access to finance and markets, he said. “Most SMEs are complaining of high taxes, the cumbersome nature of tax collection and the number of different taxes levied by central and local governments is making it difficult for the sector to grow and thrive.” We are recommending and encouraging the creation of different types of financial institutions, especially those that can serve rural areas and a boost in guarantee funds for SMEs that cannot raise the required collateral, he added. According to Manzi, access to finance remains a big challenge for SMEs sector. For instance, access to formal financial services and high cost of credit are making it difficult for most SMEs to break through. The situation is compounded by collateral requirements by banks and high transaction cost, especially on small loans, Irene Musayidire, the director of administration and finance at Attitude Builders International said. “And this is where we would like to see more focus as we usher in 2015-2016 financial year,” she said. Investing in technology The private sector is recommending the establishment of more business incubators where SMEs can be housed and provided with various shared services such as secretarial. This, according to experts, will help boost competitiveness of the sector and ultimately growth of the export sector. Simon Peter Ebitu, the production manager at Speranza Breweries, says government needs to pay more attention on the supply of water and electricity to further reduce the cost of doing business for the investors. This is the cornerstone of any development and growth of small and medium enterprises, Ebitu said.

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Make financial services more accessible to SMEs, says PSF