Majority of Zim SMEs players generating less than US$100 monthly income

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By Alois Vinga

CONTRARY to the exaggerated economic impact of the Micro-Small to Medium Enterprises (MSMEs) , a recent FinScope survey into the sector’s activities has established that the majority of players in the sector have a business owner personal monthly income which is less than US$100 per month.

 The insightful report says the majority of players in the sector earning far below the figure with 18% of the sector’s players receiving incomes ranging between US$300 to US$699, while the majority are receiving less than US$100.

“There are about 302 thousand full-time employers with 1,3 million full-time employees (FTE) up from 235 thousand employers with 622 thousand FTEs in 2012.The sector has 330 thousand business owners who also regard themselves as employees of the business,” the survey said.

The survey says 65% of the full time employees in the sector are male, 15% being family members out of which 49% have high school education and 39% being in possession of a vocational or university qualification. 

The survey establishes that 84% of the businesses in the sector are informal with the majority shunning costs associated with registration.

The majority of the businesses in the sector are at risk of failing with just 5% being very successful.

“However, this segment is also key for new entrepreneurs bringing innovative products and services with most of these (55%) being in the start-up and growth phases.

“Over time, growing this sector will grow the other micro, small to medium segments. However, the sector is currently dominated by individual and micro-enterprises most of which are female business owners,” said the report.

Formalisation has not improved over the past decade at 14%, with the lowest proportion being in the individual to small enterprises. The main barrier is due to business size where the enterprise is too small or lacks funds for registration.

It is observed that the use of technology in the sector appears to be limited to communication devices and social media platforms for marketing purposes – all mobile phone based amid realisation that online presence of MSMEs in Zimbabwe is still in its infancy and would also require a strong digital payments infrastructure to grow it.