Slow GRN Pay Process Is Lethal To SMEs
THE growth and the future of any national economy is anchored in the existence and prospects of the small and medium enterprises (SMEs) Given this fact, the onus is on the government to ensure that opportunities are made available to give these economic vehicles fuel to run.
This is realised by initiating national projects in which these enterprises participate. The objectives hereof are, among others, to accord these future corporate entities a chance to build knowledge, hone skills and portfolios that enable them to compete profitably, years ahead. Moreover, they have this opportunity to generate revenues that enable them to sustain themselves while weathering various economic and technological challenges. It should be noted however that the financial landscape of most of these SMEs is quite fragile, given the heightened cost of operations especially in their infant stages. Most of them start with hardship in the quest to satisfy the requirements of the contacts/tenders or projects they secure. As such most of them go out of their ways to get resources such as loans as start-up capital, the option which later lands them in financial strain. The government as a proponent of the SMEs has a role to play in an ensuring that mechanisms are in place to stimulate and enhance the pace of growth of the SMEs in terms of starting capital or advance proceeds, so as to minimise the strain of financial obligations. Contrary to that is that the government allowed these SMEs to start to operate without this crucial support. Subsequently, SMEs will use financial facilities and means that exert pressure and obligations in light of repayments. Not a bad way to go through. But, what the government is failing to do is to ensure that their debts to SMEs are paid timeously. Instead payments are made too late, after when the enterprises would have incurred unsubstantiated costs that pose severe financial strain on the affairs of the enterprise. The results are that the enterprise will be forced resort to unfavourable measures, such as retrenchments, payment defaults and/or worse, liquidation of the enterprise. This is lethal to the SMEs sector. It calls for improved and effective payment processes and systems, should SMEs still be deemed as the back-bone of the future state economy and development conduit!
K Shuukwanyama
By email