The Private Sector Development Association(PSDA) has accused Commercial Banks in Zambia of favouring foreign contractors at the expense of the Local contractors when lending money.
PSDA Chairperson YUSUF DODIA says Foreign Contractors are finding it easy to borrow money from Commercial Banks to undertake government projects yet Local contractors are denied access to financing by the same Commercial Banks.
Mr. DODIA has appealed to the government to come to the aid of Local contractors by guaranteeing loans they obtain from banks to carry out government projects.
He said this in Lusaka today when he appeared before the parliamentary committee on Communication, Transport, Works and Supply chaired by MOOMBA Member of Parliament, VITALIS MOOYA.
Mr. DODIA says the future of Zambia lies in the growth of the local private sector which needs support from government.
He added that the construction sector offers a great leap forward for Zambian contractors to undertake larger portion of construction works thereby creating wealth and employment.
Meanwhile, the Small and Medium Contractors Association says government’s 20 percent subcontracting policy has not benefitted the targeted local contractors.
Association Secretary General DANNY SIMUMBA says the targeted local contractors have not benefited from the policies despite government’s move to put in place the 20 percent subcontracting policy in place.
Mr SIMUMBA has since called on government, technocrats and stakeholders to relook at the policies saying that it has benefited foreign contractors unlike the targeted locals.
He says the implementation of the policy to give 20 percent subcontract local contractors by foreign contractors has not been done well.
M And Small and Medium Scale Contractors Association Chairperson MUTALE MPEPO has called for the revision of the policy.
MR. MPEPO says the 20 percent is too minimal to sustain the local contractors.
Those are discussion we want to hear. These banks are really unfair to us the SMEs. I know they come with excuses of us mismanaging the funds but how about providing other incentives like order finance, invoice discounting even buying the required thing on behalf of the client. Its not always a loan which we want to reflect in the account just incase you are scared we shall buy FORD RANGERS and start buying sausages in kilometers instead of kgs. Its only through the participation of the SMEs tht we shall grow this economy. iam a proud employer of ten people who are not my relatives just so you know the importance of this discussion.
In Zambia we remain institutionally shackled with the same colonial mentality and we need to work up sonner rather than later.
I have never seen a country that favours foreigners more so than it’s own people. I say institutionally because the problem starts from the very head of state, through all the power institutions and down to the common villager in rural Zambia.
Bring a white face in and all doors to anywhere in Zambia will be open with ease.
Now what country makes progress (any progress) when loyalties and opportunities are all directed into the hands of foreigners?
We need to wake up and change our “thinking”
In addition, we need our local millionaires to fund SME’s too. We cant only rely on banks for funding. SME’s should put there businesses in order too.
Just set up your own bank and lend to yourself.
You mean they should even use different evaluation criteria when they assess you local companies for credit risk? I think these are pure business decisions that the banks make to manage their own risk. It is common all over Africa that local is riskeir than foreign company because of differences in corporate governance imparatives; so why cry instead just convincing the banks you can pay back – even if you do not even prepare any financial statements, and your proceeds are deposited in personal accounts, rather than campany bank accounts! It is such a risk venture, is you ask me; so the banks may be right.
In Zambia, you do not need a white face to be granted red carpet treatment? Any foreigner is treated differently, Zambians always bend over to assist foreigners.
Observe the behavior of the so called 20% that get access to funding, shopping trips galore Joburg Dubai etc, request access to financial institutions and see how many of our people pay back on time and in full amounts you would be shocked, a basic measure is use that against 10 people you would lend your personal money and have 100% confidence they will pay you back.
Why do you think the kaloba business is huge these days we tend to be poor financial managers in most aspect of our lives. Most of our people only begin to understand money and savings in much later in life problem we are not savings oriented more consumption based.