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SMEs lament slow arrears settlement

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Micro small and medium enterprises (MSMEs) have lamented delays by the government in awarding contracts to suppliers due to bureaucratic processes.

The MSMEs, through their mouthpiece, the National Association of Small and Medium Enterprises (Nasme), also decry delayed settlement of service arrears by the government, a thing they say is frustrating beneficiaries of the MSME Participation Order of 2020.

In an interview, Nasme Chairperson William Mwale said since the day the order was introduced, there has been a positive change in the awarding of public contracts among MSMEs.

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He said some barriers that MSMEs were facing such as expensive bid securities were removed.

However, Mwale was quick to mention that since most goods are imported, international prices of goods are fragile and subject the MSMEs to business losses.

“There is delayed payment to MSMEs due to transition to a more advanced electronic payment system, MSMEs mostly rely on loans since cash flows are liquid any slight delays of payment past agreed amount of time hold a serious threat to existence of MSMEs business to the extent that some lose properties due to accumulation of interest rates from lending institutions,” Mwale said.

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Executive Director of the SME Chamber James Chiutsi said the order just started to bear fruits, but more needs to be done.

“One of the requirements by buying ministries, departments and agencies is to produce their buying plans for a period; we haven’t seen that yet,” Chiutsi said.

Speaking recently on Times Exclusive programme on Times Television, Minister of Trade and Industry Mark Katsonga Phiri said the government has also faced challenges, especially where the MSMEs are conniving with foreigners.

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