Small to medium enterprises (SMEs), which have been touted as the new engine of the Zimbabwean economy are facing a myriad of challenges inhibiting their growth.

A number of SMEs in clothing, leather, furniture and hardware sub-sectors are failing to thrive owing to operational challenges that have faced small business for long.

Active Marketing International (AMI) Marketing Executive, Michele Parirenyatwa told the ZBC News that lack of affordable working space and the high cost of capital as major viability constraints.

A Managing Director with a local cosmetic company, Mr Titus Munyaradzi added that non-availability of raw materials is affecting producers who have to rely on imports.

“Of late cash constraints are making transactions difficult for SMEs as some suppliers of raw materials operate on a strict cash basis,” he added.

According to International Expo Chairman, Mr Delight Makotose, interventions that should benefit SMEs appear to be in vain due to lack of a clear database of small businesses.

Various SMEs said there is need for innovative ways to overcome challenges they are facing as many of them have been operating for many years but failing to graduate into the main stream economy.

Experts called on the capacitation of SMEs, saying they have proven over time that they are a vital cog in the country’s economic recovery path.

“Emerging economies have realised that the SMEs sector is a key player and major contributor to the gross domestic product. India is a point of reference, where SMEs contribute around 45% of the industrial output and 40% of exports. This therefore calls for the availing of funding to the sector,” an Economic Analyst, Miss Ruth Kudaro said.

SMEs have been crying for a piece of the cake especially in the allocation of government tenders and another analyst, Mr Milton Zengeni said SMEs need to be organised if they are to benefit from such arrangements.

“There is need to ensure that SMEs are captured in a database that includes information on areas of specialisation, turnover, employees and markets. Once funds are availed then such interventions will surely see capital injections coming their way,” he said.

Despite being smaller in size, SMEs are the most important enterprises in the economy due to the fact that when all the individual effects are aggregated, they surpass that of the larger companies.

Business analyst, Mr Isaiah Chitakatira noted that SMEs are critical to national development and must be part of the growth path.

Statistics show that every nine out of 10 jobs are created by SMEs worldwide and improving their access to finance means faster growth, enhanced productivity and internationalisation, all critical elements for any country’s sustainability agenda.