Financing a company or an SME in Zimbabwe
In Zimbabwe, entrepreneurs fund their business through commercial banks, SMEDCO, Empower Bank for young people or MFIs, by presenting a registered company, a ZIMRA tax clearance and security that is often movable property recorded on the Collateral Registry.
Who finances SMEs in Zimbabwe
CBZ, Stanbic Bank Zimbabwe, FBC, NMB and BancABC have SME departments that fund working capital and equipment. SMEDCO, a state-owned company, supports small businesses, while IDBZ steps in on larger infrastructure projects across the country.
Registering your company with the Zimbabwean registry
Banks ask for a company or entity registered with the Companies Registry under the law on companies and other business entities. Private limited company status makes it easier to open a business account and to have the application analysed.
The ITF263 tax clearance issued by ZIMRA
The ITF263 tax compliance certificate is demanded by many lenders and public-sector buyers. A business without one is treated as risky and may suffer withholding tax on the payments it receives from its clients, squeezing its cash flow.
Young founders and Empower Bank
Empower Bank finances young project holders, including those leaving vocational training. Amounts remain modest, and the bank looks first at the viability of the proposed activity and the young entrepreneur's capacity to repay the loan.
Dollar working capital for Zimbabwean SMEs
Raw material suppliers often demand payment in dollars, which steers businesses towards credit lines in that currency. Banks then check that turnover is also received, at least in part, in dollars to cover the repayments.
Stock, receivables and machinery pledged as security
An SME can pledge its stock, customer receivables or machinery, registered on the Reserve Bank Collateral Registry. This mechanism helps workshops in Siyaso or Gazaland, which rarely operate on titled land and have little else to offer.
Trucks and tractors on finance lease
To acquire a truck, a tractor or a machine, leasing avoids tying up cash. Our guide to car leasing in Zimbabwe describes the lessors and the conditions attached to these finance lease contracts for businesses.
Market vendors and a first loan
A market vendor or a new artisan will find it easier to get a first loan from an MFI. Our guide to microfinance loans in Zimbabwe presents these institutions, which often serve as a springboard to bank credit.
Artisanal gold mining, tourism and agro-processing
Small-scale gold mining, tourism around Victoria Falls and Kariba, agro-processing and digital services attract funding. Fidelity Gold Refinery buys gold from small producers, and some banks finance the equipment used by these small-scale miners.
A business plan built around ZESA load-shedding
Credit committees expect a costed business plan with projections in dollars, an analysis of local competition and a repayment plan. ZESA power cuts must be factored into costs, through a generator or solar panels.
Afreximbank and AfDB credit lines
Credit lines from funders such as the African Development Bank or Afreximbank sometimes flow through local banks and IDBZ. They target specific sectors and set eligibility criteria that must be checked with the partner bank before applying.
A look at Botswana's CEDA model
Botswana has a public SME funding agency, CEDA, with a different approach. Our guide to the business loan in Botswana lets you compare that scheme with the options available to Zimbabwean entrepreneurs.
Building an SME finance application in Zimbabwe
- Register the business, open a business account and run most of your takings through it.
- Obtain or renew the ITF263 tax clearance from ZIMRA.
- Prepare financial statements or, for a small outfit, twelve months of sales and expense records.
- Write a business plan setting out the need, the preferred currency and the source of repayment.
- Identify available security and plan its registration on the Collateral Registry.
- Submit the application to several funders, including SMEDCO or Empower Bank depending on your profile.
Cost of business finance in Zimbabwe
| Item | Main variable | Comment |
|---|---|---|
| Interest rate | Currency, security and sector | ZiG loans tied to the RBZ policy rate |
| Arrangement fees | Amount and complexity of the file | Negotiable for large clients |
| Registering the security | Number of assets registered | Collateral Registry fees |
| Asset insurance | Value of equipment or stock | Required by the lender |
| Accounting fees | Size of the business | To prepare financial statements |
Documents for a Zimbabwean business loan file
- Company registration certificate and list of directors
- Articles or constitution of the company
- ZIMRA ITF263 tax clearance
- Municipal or sector operating licence
- Financial statements or twelve months of bank statements
- Business plan and cash-flow projections
- ID documents of shareholders and directors
Why Zimbabwean SMEs get turned down
- Taking sales in cash without banking them, so that bank statements fail to reflect the real level of activity.
- Letting the ITF263 certificate expire, which alarms the banker and shuts the door to public tenders.
- Requesting dollar credit without dollar takings, exposing the business to an exchange-rate risk deemed excessive.
- Paying a middleman who promises access to a public youth fund in exchange for processing fees.
- Mixing personal and business money in the same EcoCash wallet, making the flows unreadable for the analyst.
Lenders to contact
- NMB Bank Zimbabwe: Zimbabwean commercial bank providing personal banking services, including personal loans described in its online customer support centre.
- FBC Building Society: Building society within Zimbabwe's FBC group, specialising in mortgage loans for acquiring and building residential homes.
Questions on financing Zimbabwean businesses
Does SMEDCO lend to start-ups?
SMEDCO supports small and medium enterprises, including some young businesses, on terms that change with the resources available. You need a registered business and a costed project, and should ask the provincial office which products are currently open.
Can an informal Zimbabwean business get a bank loan?
It is difficult, because banks require registration, a tax clearance and accounts. An MFI or a group programme is often the first step, before formalising the activity in order to access bank credit later on.
What security do Zimbabwean banks accept from an SME?
A title deed remains the preferred security, but banks increasingly accept equipment, vehicles, stock and receivables recorded on the Collateral Registry, as well as personal guarantees from the directors of the company.
Is business finance in ZiG more expensive?
ZiG loans follow the Reserve Bank policy rate, which is generally higher than the rates applied to dollar loans. The choice depends on the currency of your takings, because borrowing in dollars without dollar income creates exchange-rate risk.