eBusiness Weekly
Prosper Ndlovu
A number of viable manufacturing projects in Bulawayo have failed to take off for years due to lack of affordable credit lines from banks, entrepreneur and one of Bulawayo’s few female industrialists, Tracey Tshuma, has said.
Despite the potential among local ventures, she said several businesses were reluctant to seek loans from banks, saying the available facilities were “expensive” and often come with stringent conditions that do not favour sound business growth, especially for start-ups.
The new Government under President Mnangagwa would have to come up with deliberate reforms on industry financing as well as establish specific packages to incentivise manufacturing growth in the economy, said Tshuma in an interview at her Niceyear Investment factory in Belmont.
Established in 2010, the company has 200 product lines that include cosmetics, personal health care, soaps, household consumer, hygienic and sanitary products, among others.
However, only a small portion of the cosmetics unit in the manufacturing business is operational while the rest are lying idle.
“I have seen that President Mnangagwa has a soft spot for business growth and has shown interest in Bulawayo in particular. Perhaps this is the time for some of us to get real assistance and grow the industry,” she said.
“All I need in my business are raw materials and working capital to produce massively. But I do not have these, and cannot take these loans at our banks because they are expensive. Our interest rates are still high for industry financing and the conditions thereof are not attractive.
“Given the capacity we have here, I would wish President Mnangagwa and his team would visit us and see what we are talking about. We need them to rescue us here in Bulawayo.”
Ms Tshuma said while demand for her company’s products was high, she was incapacitated to satisfy the market supply needs despite having the right equipment. In the absence of affordable finance, she said her family business was operating on an insufficient cash budget, which limits their potential.
As a result, she said the firm, which used to employ up to 25 workers has now cut its workforce to less than five.
“What we want as a company is working capital and raw materials only. We do not even want forex because our raw materials can be sourced locally. The banks I have engaged have given me stringent collateral terms and high interest rates to the point I thought it’s better without these.
“Our business just needs $10 000 minimum to revamp production, but we cannot do anything without money. Our clients locally and beyond borders keep knocking and we lose business by failing to supply,” said Tshuma.
Although the apex bank has tried to persuade banks to reduce lending rates to below 12 percent from as high as 40 percent in recent years, enterprise surveys have pointed to the severity of the access to finance constraint in the Zimbabwean economy. This has seen a smaller fraction of firms using bank loans to finance production while many in this bracket are sweating in trying to clear arrears citing high interest rates. The finance sector is regarded as the engine that puts in motion productive and economic activities.
As such, Tshuma believes real business is in manufacturing as opposed to buying and selling and that this requires Zimbabwe to invest more in manufacturing finished products and value addition.
However, she said as a result of prevailing cash challenges in the economy, their suppliers were demanding upfront payment before they deliver raw materials.
“Essentially, there is no credit line in Zimbabwe, it is all cash. We have capacity as local manufacturers and if Government assists us we can produce more and for exports. We wait to see how we will be supported to overcome these challenges. We want the President to appreciate that Bulawayo businesspeople are not sleeping but it’s an issue of capacity.
Tshuma has been in business for years having begun as a pharmaceutical retail operator in early 2000s.
She left the country in 2005 for Botswana before going to China for industrial manufacturing training for nearly two years under a sponsored arrangement.
During her stint there, Tshuma said she bought some key machinery and sent it home. On her return in 2008 she established the manufacturing business, starting with oils and soaps. At that time she was operating on rented factory space before buying her own land and building her own factory.
