An Indian company providing turnkey solutions has urged the government to come up with policies that would enable small-to-medium enterprises (SMEs) to thrive.
Fabtech Technologies International Ltd official, Rajshekhar Ray, told NewsDay in an interview that for SMEs to thrive in the country, government should come up with policies that enable them to grow like what had happened in India.
“First of all the government should come up with policies that enable SMEs to also thrive. So for example one of the policies in our country we have is, if you get some rating point, reference is given if you bought your raw material, let’s say it’s a manufacturing industry,” Ray said.
“Sometimes it depends on what policy you bring, maybe the government might come up with a policy that 30% of all raw material production must be bought from an SME sector. Government has to make those kind of things.”
“It’s either you will force the government or the government forces you to say you will have to buy or you provide incentives to private business, you say that if you buy from so and so, then when you borrow money from the bank it could be at a concessional rate.”
The SMEs sector in Zimbabwe has been facing a litany of challenges chief among them, lack of access to capital and inadequate government support despite accounting for 50% of the country’s gross domestic product and employing the majority of the country’s population.
Raj said they had an issue in India whereby SMEs were not being paid timeously by big companies.
“Now there were bills outstanding for three months, now in three months you will close down shops because you can’t pay salaries, you can’t do anything,” he said.
He said when public-listed companies in India publish their annual financial results, they should mention how much they bought during the year from SME sector and how much was outstanding.
“So it’s not a good sign if a company is showing you owe so much to the SME because their rating is according to the stock market. That’s how they have made it but when you bring in legislation like that, it definitely promotes,” he said.
According to the company website, Fabtech provides turnkey solutions to a wide range of industries, with a strong focus on pharmaceuticals. The company owns more than 700 installations worldwide, covering more than 42