Ministry of Small and Medium Enterprises and Co-Operative Development

MINISTRY OF SMALL AND MEDIUM ENTERPRISES
AND CO-OPERATIVE DEVELOPMENT
NATIONAL MICRO, SMALL AND MEDIUM ENTERPRISES POLICY FRAMEWORK

(2014 -2018)
MSMEs, The Engine for Economic Growth – Promoting Sustainable Economic Development and Growth Page 1
Table of Contents
Content Page Number
Abbreviations/Acronyms 3
Preface by His Excellency 4
Foreword by Hon. Minister 5
Executive Summary 7
1. Background 8
1.1. MSME Contribution to the Economy 8
1.2. International Outlook 8
1.3. Achievements from the SMMEs Policy Framework
2002 – 2012 9
1.4. Challenges and Constraints to MSME Development 11
1.5. Government Support to MSMEs 12
2. Definition of MSMEs 12
3. The Policy 20
4. Policy Interventions Strategies 21
4.1 Enabling Legal and Regulatory Environment 22
4.2 Research and Development 22
4.3 Entrepreneurship Development 23
4.4 Management, Corporate Governance and
Technical Skills Development 23
4.5 Workspace and Infrastructure Support 23
4.6 Production and Information, Communication and
Technology (ICT) 24
4.7 Business Management and Support 26
4.8 Rural Industrialisation 26
4.9 Market Development and Trade Promotion 28
4.10 Investment Promotion 30
4.11 MSMEs Financial Support 31
5. Cross Cutting Issues 33
6. Institutional Framework and Policy Coordination 34
7. Action Plan and Implementation Strategy 36
8. Monitoring and Evaluation 36
Tables
Table 1 Classification of MSMEs 14
Table 2 Definition of MSMEs based on points 19
Pictures
Pic. 1 : MOU with International Rescue Commission (IRC) 9
Pic. 2 : Arts and Craft National Handicraft Centre 9
Pic. 3 : MSMECD equipment installed at HIT 10
Pic. 4 : FinScope Survey Commissioning Ceremony 10
Pic. 5 : MSMEs working shelters in Hatcliff 12
Pic. 6 : Agriculture 15
Pic. 7 : Arts and Culture 15
Pic. 8 : Mining and Quarrying 16
Pic. 9 : Transport 16
Pic. 10 : Manufacturing 17
Pic. 11 : Construction 17
Pic. 12 : Tourism 18
Pic. 13 : Retailing 18
Pic. 14 : His Excellency The President of the Republic of

Zimbabwe Cde. R.G. Mugabe 26
Pic. 15 : Fisheries in Binga 27
Pic. 16 : MSME exhibiting at ZITF 30
Abbreviations/Acronyms
MSMECD Ministry of Small and Medium Enterprises and Co-operative

Development
SMMEs Small, Micro and Medium Enterprises
MSMEs Micro, Small and Medium Enterprises
SMEs Small and Medium Enterprises
SBAC Small Business Advisory Council
SEDCO Small Enterprises Development Corporation
SMEDCO Small and Medium Enterprises Development Corporation
NGO Non-Government Organisation
STERP Short term emergency recovery programme
SIRDC Scientific and Industrial Research Development
Corporation
SAZ Standards Association of Zimbabwe
SADC Southern Africa Development Community
COMESA-STR Common Market for Eastern and Southern African – Simplified

Trade Regime
IRC International Rescue Committee
MTP Medium Term Plan
MDGs Millennium Development Goals
ZIMASSET Zimbabwe Agenda for Sustainable Socio-Economic Transformation
ZIMSTATS Zimbabwe National Statistical Agency
ZIMTRADE Zimbabwe Trade
ZIMRA Zimbabwe Revenue Authority
PPPs Public Private Partnerships
PPDs Public Private Dialogue
FDI Foreign Direct Investment
FOREWORD BY HIS EXCELLENCY
The micro small and medium enterprises sector

(MSMEs) plays a critical and important role in
employment creation with approximately 5.7 million
people working in the sector. The sector contributes
significantly to poverty alleviation, wealth creation
and act as a buffer against slipping into deeper
poverty therefore reducing individual and household
vulnerability.
The main thrust of the MSMEs policy is to have in

existence a vibrant and gender sensitive micro,
small and medium enterprises (MSMEs) sector that
embrace value addition with export orientation for
sustainable economic growth and development. The
MSMEs Policy is therefore anchored on sustainable
broad economic empowerment and employment creation.
This will be achieved through the provision of an enabling and regulatory environment
for creating and growing business opportunities, skills development and provision of
funding for indigenous business ventures especially start-ups and those run by
previously disadvantaged individuals. The aim is to support upward mobility and growth
of MSMEs to mature into more sophisticated formalized enterprises.
While fostering linkages and formalisation among the MSMEs across all sectors of the
economy, the policy encourages value addition of Zimbabwe’s natural resources and
facilitates access to and upgrade of technologies in order to raise productivity and
competitiveness of the sector.
The policy aims to improve access to finance in order to achieve financial inclusion of
innovative youth and women, contribute towards employment creation, poverty
alleviation and to grow the economy.
The policy outlines the key principles and strategic interventions that will guide the
development of the sector as the engine for economic growth whilst ensuring the
promotion of a sustainable economic development and growth trajectory.
This is in line with the vision of the Zimbabwe Agenda for Sustainable Socio-Economic
Transformation (Zim Asset) which is ―Towards an Empowered Society and a
Growing Economy‖, as the enhanced support for MSMEs is seen as one of the key
drivers for the projected growth targets of the economic blue print.
The challenge facing the country is the recognition that gender sensitive, diverse,
vibrant and dynamic MSMEs are a prerequisite for achieving sustainable, political, social
and economic security among the people of Zimbabwe.
I therefore urge all stakeholders particularly Government including Local Authorities,

Financial Institutions, Business Associations and Development Partners including the
Civil Society to embrace this vision and harness their energies towards the success of
this policy.
His Excellency, R.G. Mugabe

PRESIDENT OF THE REPUBLIC OF ZIMBABWE
FOREWORD
Government launched the Small, Micro and Medium Enterprises (SMMEs) Policy and
Strategy Framework in 2002. The Ministry
of Small and Medium Enterprises
Development was established in 2002 to
spearhead implementation of the Policy.
The Policy was however implemented
under unfavorable social, economic and
political environment.
Government in the post 2013

Harmonized Election period crafted the
Zimbabwe Agenda for Socio-Economic
Transformation (ZIMASSET) October 2013
– December 2018, to provide an enabling
environment for sustainable economic
empowerment and social transformation to
the people of Zimbabwe. This policy
framework is meant to bring about
stabilization of the macroeconomic
environment and create development
opportunities for micro, small and medium
enterprises.
Hon. Sithembiso G.G Nyoni

Minister of Small and Medium Enterprises
and Co-operatives Development
It is also important to appreciate that the Zimbabwean economy currently comprises

predominantly of MSMEs in all sectors of the economy. There is need for a vibrant
MSMEs sector that delivers competitive products and services in all the sectors of the
economy and the export market
The Ministry of Small and Medium Enterprises and Co-operative Development reviewed
the 2002 policy in order to bring it in line with current economic realities so as to
achieve the following objectives:
 To proffer a new definition of micro, small and medium enterprises which is in
line with international standards and the definition of such enterprises in the
Small and Medium Enterprises Act (Chapter 24:12) of 2011,
 To strengthen the already existing development momentum and zeal in the
sector towards poverty reduction, economic growth, empowerment and
employment creation; and
 To ensure socio-economic and environmental sustainability.
The reviewed Policy will provide a basis for a shared vision by all stakeholders in
advancing the cause of micro, small and medium enterprises and also in providing an
enabling and regulatory environment for their development and growth.
I acknowledge the extensive consultative process undertaken involving Government,

Development partners, MSMEs Chambers and Associations and various stakeholders in
finalizing this reviewed policy document. I therefore call upon all organisations,
institutions and groups in the public and private sectors, development partners and civil
society to partner with the Government in promoting the development and growth of
the MSMEs sector.
Government will, through the Ministry of Small and Medium Enterprises and Co-
operative Development, continue to lobby for the creation of an enabling legal and
regulatory environment and mobilize resources to ensure sustained MSMEs
development and growth through the implementation of the Micro, Small and Medium
Enterprises Policy and Strategy Framework at all levels.
I look forward to a new economic dispensation in which the MSMEs sector shall be
visible and recognised as an engine for sustainable economic growth and development.
Hon. Sithembiso G.G Nyoni

Minister of Small and Medium Enterprises and Co-operatives Development
EXECUTIVE SUMMARY
The MSMEs policy maps out measures to address the challenges being faced by
MSMEs. An appreciation of the economic context in which the review is being made,
enhances understanding of the importance of the micro small and medium
enterprises in Zimbabwe. The policy provides measures to address the constraints
being faced by the sector. Given the dominancy of MSMEs economic activity and
the demise of the large companies, Government has recognized the need to focus
on the MSMEs sector for positive and sustainable development of the economy.
MSMEs have higher potential and flexibility to invest in any location and make
meaningful contribution to poverty reduction, economic development, employment
generation and improving the economic welfare of women, youth and other
disadvantaged groups.
Implementation of the SMMEs Policy has faced numerous challenges that have
impacted negatively on the sector’s development and growth. The negative impact
of the macroeconomic instabilities has necessitated this review to come up with an
integrated, coherent and holistic policy and strategy framework that will give
impetus on the development of the sector in Zimbabwe.
It is envisaged that the Policy shall:-
 Enhance the creation and maintenance of an enabling legal and regulatory

environment for MSMEs development and growth;
 Facilitate coordination of different policies and programmes at national level;
 Provide an appropriate institutional mechanism to facilitate MSMEs

development and growth efforts;
 Commit MSMEs growth over a longer term rather than dependence on any
quick fix solutions;
 Coordinate resource mobilization strategies and set priorities to ensure

appropriate allocation of limited public resources;
 Rationalize and coordinate support programmes;
 Delegate tasks, responsibilities and accountability to all the stakeholders; and
 Promote formalization and graduation of informal to formal, and from micro
to small, small to medium, and medium to large enterprises.
Once the reviewed MSMEs Policy is approved by Government, a matrix of Beacon

Projects and an Action Plan to implement the policy will be developed.
1.0 Background
In order to appreciate the need for a review of the national policy on Micro,
Small, and Medium Enterprises Development, it is necessary to understand some
of their challenges and contribution to the economy, the contributions by MSMEs
elsewhere internationally are also highlighted.
1.1 MSMEs Contribution to the Economy
In the Zimbabwean context, the MSME sector is considered to be a major player in

the economy contributing an estimated 60% of GDP and an estimated 50% to total
employment (MTP 2011-2015). Activities in the MSMEs sector contribute to the
achievement of the Millennium Development Goals (MDGs). The sector has in
recent years, assumed greater prominence as a source of livelihoods through the
absorption of retrenchees from closing companies, school leavers, youth, women
and those with disabilities.
There is awareness in Zimbabwe that development of MSMEs is crucial for the

achievement of broader development objectives. Potential benefits include:-
 Employment creation, poverty reduction and a source of livelihoods;
 Urban and rural development;
 Value addition and beneficiation of local natural resources utilising
available expertise;
 Backward and forward linkages that strengthen economic growth;
 Flexibility and innovative capacity to generate new business with less
capital;
 Addressing the local and regional economic imbalances within the country;
 Indigenisation of the economy;
 Spreading the entrepreneurial spirit within communities;
 Facilitation of a wider economic inclusion, creation and equitable
distribution of wealth; and
 Food security and nutrition.
1.2 International Outlook
International experience suggests that MSMEs can make a major contribution to
economic growth, employment creation and poverty reduction. Their importance
in various countries is captured below:
 Provide around 50% of productive employment, (UK: 45%, EU: 66%,

Japan: 72% and in Developing countries: 50%-70%).
 In South Africa, statistics show that SMEs in 2005 absorbed nearly 57% of
the people employed in the private sector and contributed 42% of formal
total Gross Domestic Product.
 SMEs contribution to GDP account for an average of 51% in high income
countries, 39% in medium income countries and 16% in low income
countries.
 In India, the informal sector contributes 70% of the country’s Gross
Domestic Product.
 Empirical evidence has shown that small businesses in Europe and Latin
America contribute more than 50% of the Gross Domestic Product.
 SMEs Contribute to about 30% of global exports by value.
 In the EU around 40% of over a million firms that export goods are SMEs;
 In Australia, nearly 70% of exporting firms and over 60% of importing
firms are SMEs.
 The small proprietor business sector in northern Italy is the source of
major innovation in the Italian economy.
1.3 Achievements from the SMMEs Policy Framework 2002 to 2012

(a) Enabling Legal and Regulatory Environment
The Small and Medium Enterprises Act (Chapter 24:12) was gazzeted. The
Act still needs operationalisation, publicity and awareness;
(b) Access to Finance

1. Most financial institutions now have
a window for MSMEs where they
provide services tailored to their needs.
Most financial institutions have
adopted the group lending schemes
especially for micro enterprises.
2. The mobilisation of resources
through savings and credit co-
operatives has seen a number of
SACCOs registered although the
ultimate goal is to establish a Co-
operative Bank.
Pic.1 : MOU Signing ceremony between Hon. Min. of SMECD
S.G.G. Nyoni and Country Director of International Rescue Committee Mr E. Mustafa
(c) Access to Markets
1. In marketing and distribution

support, locally, infrastructure has
been provided in some areas and
internationally efforts are underway to
operationalise in Yiwu, China a MSMEs
market pavilion.
Pic. 2 : Arts and Crafts at National Handicraft Centre
2. Trade facilitation programmes through the creation of One Stop Border posts at
Chirundu as well as the facilitation of Cross Border Trading through the Comesa
Simplified Trade Regime (STR) was effected and is operational between Zimbabwe,
Zambia and Malawi. The introduction of the Passenger/Cargo manifest system also
facilitated easy access to markets by cross border traders again between Zimbabwe and
Zambia.
(d) Technology Infrastructure Support
1. The Infrastructure Development Policy was approved by Cabinet in 2011 and

most stakeholders’ strategic plans are now in sync with the MSMEs development
agenda.
2. To facilitate
introduction of new
technologies and innovation,
common facilities centres
have been set up in more
than ten places countrywide
including those at the Harare
Institute of Technology and
the Bulawayo Polytechnic.
Establishment of Technology
Parks and incubator facilities
still need to be pursued.
Pic. 3 : MSMECD equipment installed at HIT
(e) Entrepreneurship, Management and Skills Development
1. To enhance information dissemination for MSMEs development, the MSMEs

Database Management
System has been put in
place.
2. To enhance
entrepreneurship at a
national level through
comprehensive entrepreneurship development programmes
at national level, most higher and tertiary institutions
introduced a subject on Entrepreneurship in syllabi.
Pic. 4 : FinScope Survey Commissioning Ceremony. From far right Secretary of MSMECD
Mrs. E.
Ndlovu, MSMECD officials Mr. D. Shure, M. Mabika and Director Research Continental –
Fonkom
Mr W.R. Ushe
(f) Targeted Support
1. To develop cluster based enterprise and embark on specific sector targeted

support programmes, sectoral business clusters have been set up following needs
identified through needs assessments.
(g) Institutional Reform
1. To provide a representative body for SMMEs advocacy fora, Small Business

Advisory Council (SBAC) has been provided for in the SME Act (Chapter 24:12).
2. To provide a coordinated and integrated institutional set-up for SMME

development, an apex body, the National Chamber of SMEs has been facilitated and has
put structures at district, province and national levels.
(h) Monitoring Mechanisms
Monitoring the implementation of the SMMEs policy and strategy has been done
through annual forum for stakeholders and to evaluate policy and strategy
implementation, stakeholders’ evaluation fora were held in 2004 and 2006.
Presentations were also made at fora organized by National Economic Consultative
Forum (NECF) in 2010 and 2012.
1.4 Challenges and Constraints to MSME Development
These include among others:-
 Environmental regulations designed for large corporations
 Uncoordinated Institutional Frameworks
 Inadequate workspace and poor status of infrastructure
 Inability to access and apply modern production and communication technologies
 Inadequate research and development, and information dissemination within the
sector
 Lack of managerial and entrepreneurial skills
 Poor corporate governance and best practices
 Lack of access to markets
 Lack of access and high cost of finance
 High levels of informality
 Inability to take advantage of intellectual property rights
 Gender disparities within the MSME sector
 Brain Drain
 HIV and Aids, Poor Occupational Health and Safety practices at work places.
Pic. 5 : MSMEs working shelters in Hatcliff constructed by American Friends (more of

these shelters are needed)
1.5 Government Support for MSMEs
 Established a fully-fledged Ministry of Small and Medium Enterprises

and Cooperative Development.
 The Small and Medium Enterprises Act (Chapter 24:12)
 The Small Enterprises Development Corporation that provide funding
and capacity building for MSMEs.
 Agricultural Development Bank (Agribank)
 Infrastructure Development Bank of Zimbabwe (IDBZ)
 Amendment of the State Procurement Board Act (Chapter 22:14)
2.0 Definition of MSMEs
The definition is derived from the Small and Medium Enterprises Act
(Chapter24:12). An MSME is a legal business entity defined by the
following variables:
 Autonomy not subsidiary branch or associate of a large business

organisation;
 Number of permanent workers;
 Capitalization excluding fixed assets;
 Turnover;
 Economic sector and
 Registration and/or Licensing
However, most MSMEs start their business operations without licenses and
gradually they obtain licenses and get into the mainstream.
In the context of this policy framework, the informal sector, that is found in all
sectors of the economy predominantly lacks accountability, operates outside of
law and is not registered or licensed. The Policy’s thrust is to formalize the
informal sector which constitutes the bulk of the micro enterprises.
CLASSIFICATION OF MICRO, SMALL AND MEDIUM ENTERPRISES

 Criteria for classifying MSMEs has been done in terms of economic sector,
size or class, maximum total number of full time paid employees, maximum
total annual turn-over and maximum gross value of assets excluding
immovable assets and is adapted from the Small and Medium Enterprises Act
(Chapter 24:12) in the following way:-
Maximum gross
value of assets
Maximum (excluding
Maximum
total number immovable
Sector or Sub-sector of Size or total annual
of full time property)
Economy Class turnover
paid $
$
employees
Medium: 75 1 000 000 500 000

Agriculture: Small: 30 500 000 250 000
Micro: 5 30 000 10 000
Maximum gross
value of assets
Maximum (excluding
Maximum
paid $
$
employees
Arts, Medium 75 1 000 000 500 000

Entertainment, Small 30 500 000 250 000
Culture, Education
Micro 5 30 000 10 000
and Sport
Medium: 75 3 000 000 2 000 000
Mining and
Small: 40 1 500 000 1 000 000
Quarrying:
Micro: 5 50 000 50 000
Medium: 75 1 000 000 1 000 000

Manufacturing: Small: 40 500 000 500 000
Micro: 5 30 000 10 000
Medium: 75 2 000 000 2 000 000

Construction: Small: 40 1 000 000 1 000 000
Micro: 5 50 000 10 000
Medium 75 2 000 000 1 000 000

Energy Small 40 1 000 000 500 000
Micro 5 50 000 10 000
Medium 75 1 000 000 500 000
Financial Services Small 30 500 000 250 000
Micro 5 30 000 10 000
Medium: 75 1 000 000 500 000
Transport: Small: 40 500 000 250 000
Micro: 5 30 000 10 000
Medium: 75 1 000 000 500 000
Retail: Small: 30 500 000 250 000
Micro: 5 30 000 10 000
Maximum gross
value of assets
Maximum (excluding
Maximum
paid $
$
employees
Medium: 75 1 000 000 500 000

Tourism and
Small: 30 500 000 250 000
Hospitality:
Micro: 5 30 000 10 000
Medium: 75 1 000 000 500 000

Services:
Small: 30 500 000 250 000
Micro: 5 30 000 10 000
Table 1: Classification of MSMEs
The following pictures show some of the MSME sectors in Zimbabwe:-
Pic. 6 : Agriculture
Pic. 7 : Arts and Culture
Pic. 8 : Mining and Quarrying
Pic. 9 : Transport
Pic. 10 : Manufacturing
Pic. 11 : Construction
Pic. 12 : Tourism
Pic. 13 : Retailing
 Sector or Sub sector of Business:
In determining whether an entity is an MSME, level of employment, turnover and total

asset value as variables are considered for scoring.
Class or Criteria Assigned

Size of Class
MSMEs (Based on
Total
Maximum Maximum Maximum Number
Total Total Gross Value of Points
Number of Turnover of Assets Scored)
Full-time (Excluding
Employees Immovable
Property)
Medium
(8 to 10 points)
Small
(4 to 7 points)
Micro
(4 and below)
Table 2. MSME Classification by points
1. The first column shows current class or size of MSMEs based on the points the
MSMEs accrued on first assessment.
2. The assigned class (fifth column) for each business is determined by getting the
total number of points accrued by the business in question under each criteria
heading under columns 2, 3 and 4.
3. Maximum points that each class or size of business accrues for each criteria are
as follows:
(a) Above Medium Enterprise 4 points
(b) Medium Enterprise 3 points
(c) Small Enterprise 2 points
(d) Micro Enterprise 1 point
4. If the total number of points for a business in respect of either two or three of
the criteria set out in the table above is—
(a) 3 to 4 points, the assigned class or size of that business will be micro
enterprise;
(b) 5 to 7, the assigned class or size of that business will be small enterprise;
(c) 8 to 9, the assigned class or size of that business will be medium enterprise.
5. If the number of employees exceeds the maximum number of employees

for a medium enterprise in the sector in question, the enterprise in
question will not be disqualified on that ground alone.
6. The maximum allowable excess for the second and third criteria shall be ten
per
centum.
7. If an enterprise exceeds either or both of the second or third criteria by ten

per
centum it shall be automatically disqualified from being MSMEs.
3.0 The Policy
The Reviewed Policy and Strategy Framework for MSMEs development, outlines
the framework and sets out strategies for implementation, coordination,
monitoring and evaluation to enhance development and growth of MSMEs.
3.1 Vision
To have in existence a vibrant and gender sensitive micro, small and medium
enterprises (MSMEs) sector that embrace value addition with export orientation
for sustainable economic growth and development.
3.2 Goals
To stimulate economic growth and create wealth;
To create sustainable employment opportunities and reduce poverty;
To promote awareness of environmental issues and practices among MSMEs.
3.3 Objectives
The main objective of this policy is to create and maintain an enabling
environment for the long term development and growth of MSMEs.
The policy will:-
 Ensure co-ordination of different policies, legislations and programmes at
national level pertaining to MSMEs;
 Provide an appropriate institutional mechanism to facilitate MSMEs growth
and graduation from informal, small to medium enterprises and the
implementation of MSMEs development efforts;
 Set priorities and ensure access to limited public resources and coordinate
resource mobilisation strategies;
 Ensure access to markets and market development, and export promotion;
 Support value addition using environmentally compliant technologies (green
economy), and
 Ensure gender sensitivity and adherence to good corporate governance.
3.4 Underlying Principles
In pursuit of these goals:-
 Stakeholders shall continue to recognize that diverse, vibrant and dynamic

and gender sensitive MSMEs are a prerequisite for achieving sustainable,
economical, social and political security among all the people of Zimbabwe;
 The stakeholders shall support the integration of micro, small and medium
enterprises development into the mainstream of local, regional and national
development initiatives;
 Government shall facilitate a level playing field based on market and Green
Revolution principles. The aim will be to develop and maintain competition
while creating an enabling environment for MSMEs to develop and realise
their full potential;
 Government shall develop and maintain good investment policies that will
attract Foreign Direct Investment (FDI) that is supportive of MSMEs
development and growth.
4.0 Policy Intervention Strategies
The main thrust of this policy is the development and growth of MSMEs in all
sectors of the economy. Emphasis will be on the sustainability and growth of
existing and the creation of new and sustainable micro, small and medium
enterprises, import substitution, value addition and export promotion.
Technology uptake will drive business incubation projects through partnerships,
joint ventures, and support programmes among others.
The following areas remain the pillars of MSMEs development and growth and
will be addressed under the Reviewed MSMEs Policy and Strategy Framework
(2014 – 2018):-
 Enabling Legal and Regulatory Environment;
 Research and Development;
 Entrepreneurship Development;
 Management, Corporate Governance and Technical Skills Development;
 Workspace and Infrastructure support;
 Access to modern Production and Information Communication Technology
(ICT);
 Business Management and Support
 Rural Industrialisation ;
 Market Development and Trade Promotion;
 Investment Promotion;
 MSMEs Financial Support;
4.1 Enabling Legal and Regulatory Environment
The complexity of the regulatory environment and the multiplicity of bureaucratic

requirements are some of the constraints MSMEs face. Concerns range from
business registration and licensing, cost of compliance, reporting procedures to
tax requirements. Though progress has been made in such areas as the
introduction of presumptive tax and the enactment of the Small and Medium
Enterprises Act, there is need for Government to continue with deregulation.
The Ministry shall implement the Micro, Small and Medium Enterprises Policy and
Strategy Framework, enforce the Small and Medium Enterprises Act (Chapter
24:12) and review legislation and policies that hinder the development and
growth of MSMEs in Zimbabwe.
4.1.1 Labour legislation and regulations

The Ministry will encourage MSMEs to form organised business and to
adhere to the laws and regulations that govern the labour market in
Zimbabwe.
4.1.2 The Local Authorities Regulations and by-laws

The Ministry shall mainstream MSMEs issues in all stakeholder plans,
particularly in local authorities’ strategic planning processes for the
provision of infrastructure and workspace.
4.1.3 Decentralisation
The Ministry shall continue to strengthen Provincial and District Offices in
a bid to facilitate service delivery and effective flow of information. The
Ministry will also engage other stakeholders to ease business registration
and /or licensing procedures and reduction of cost of compliance,
informality and non-adherence to taxation laws and regulations. This
should reduce the cost of doing business and penalties imposed on small
businesses.
4.1.4 Deregulation
The second phase of deregulation did not take place and there is need for
a sector focus approach for deregulation as it is easy to implement and
monitor.
4.2 Research and Development
The Ministry will continue to support and strengthen the capacity to carry out
Research and Development and will use research information for the
development of appropriate policies, programmes and schemes for the
development of the MSMEs sector.
Collaborations in research and development with research institutions and

universities will facilitate access to innovative technology, markets and
information by MSMEs to enhance quality and competitiveness of their products
and services.
4.3 Entrepreneurship Development
Entrepreneurship culture will be cultivated at national level to

foster economic development. Training and skills upgrading will be carried out on
a national basis for existing MSMEs, school leavers and the unemployed. Special
targeted training for youths, women and those physically challenged will be
provided in collaboration with service providers.
4.4 Management, Corporate Governance and Technical Skills Training
The Ministry will promote, facilitate and encourage the development and
upgrading of management, corporate governance and technical skills training of
MSMEs at all levels and across all the sectors of the economy.
4.4.1 Corporate Governance and Promotion of Good Business Ethics

The Ministry will facilitate, support and encourage MSMEs to adhere to
corporate governance and business ethics principles and guidelines. Good
governance and standards of excellence will be critical for all sectors of
the economy. Individual MSMEs will be encouraged to develop their codes
of conduct and ethics to guide their operations.
4.4.2 Technical Skills Training

Institutions of higher learning, technical colleges, vocational training
centers and the private sector will play a key role in providing technical
skills training to MSMEs.
4.5. Workspace and Infrastructure Support
The Ministry will facilitate the provision of serviced land, business
premises and continue to improve and expand the physical
infrastructure and utilities in collaboration with local authorities,
private sector, MSMEs and development partners.
The Ministry will take the following measures to improve the situation in
infrastructure provision: -
4.5.1 Land Provision
The Ministry will urge local authorities and other stakeholders to identify
and provide MSMEs with suitable land for workspaces and for
infrastructure development, through a consultative process in urban and
rural areas, provinces and districts.
4.5.2 Infrastructure development
The development of infrastructure through the implementation of the

Public Private Partnership (PPPs) will be pursued. Appropriate places for
MSMEs infrastructure development will be identified for investors. Private
investors will be encouraged to develop infrastructure for MSMEs under
the BOT and BOOT arrangements.
Business incubators, commercial hives, industrial parks, factory shells,

innovation hubs, vendor marts and techno parks will be established
through these Public Private Dialogues (PPDs).
4.5.3 Water and Energy
The Ministry will engage relevant stakeholders for reliable supply of water
and energy as these commodities are essential for the development of
MSMEs.
4.5.4 Roads and Rail
The Ministry will lobby for the development and maintenance of trunk
road network and rural and urban road network to facilitate economic
activities and access to local, regional and international markets.
4.6. Production and Information Communication Technology
The Ministry will establish appropriate technological facilities,
equipment hubs, technology parks, innovation hubs and rural service
centres and the acquisition and adaptation of technologies as well as
enhance networking between Research and Development Institutions
and MSMEs in a bid to upgrade technologies so as to raise the
productivity and competitiveness of the sector.
4.6.1 Production technology
The Ministry will continue to facilitate appropriate technology transfer to

enhance MSMEs productivity and competitiveness in order for them to
respond to the demands of the twenty first century. Strengthening of
multilateral, bilateral and regional relationships will also facilitate
technology transfer.
4.6.2 Equipment Leasing
Private sector will be encouraged to engage in equipment leasing and toll

manufacturing for MSMEs easy access to plant and machinery.
4.6.3 Quality Assurance
Deliberate action will be taken to link the SAZ with MSMEs to enhance
quality of products and services in accordance with international
standards. Programmes on quality assurance will be given priority and
MSMEs will be assisted to attain international standards.
4.6.4 Incubation Centres
In order to reduce the need for a large upfront capital outlay for
infrastructure support and access to technology, business incubators for
startup MSMEs will be established.
4.6.5 Industrial Clusters
The Ministry will promote and develop industrial clusters for the MSMEs to
take advantage of the economies of scale. The Ministry will continue to
provide specific support programmes to clusters identified to have the
potential for export and growth where opportunities are great for
downstream and value added activities.
The previously identified clusters of agriculture and agro processing,

mining, transport, light engineering and metal fabrication, carpentry and
furniture making, textiles and clothing, leather, arts and crafts, and
tourism will continue to receive specific support throughout the value
chain to enhance their development and growth.
4.6.6 Information Communication Technology (ICT)
The Ministry will facilitate access to ICT facilities for MSMEs and promote
use of information communication technology to ensure MSMEs
competitiveness in the global market.
Pic. 14 : His Excellency The President of The Republic of Zimbabwe Cde R.G. Mugabe –
touring Indo-Zimbabwe Centre at HIT
4.7 Business Management and Support
MSMEs will be trained in business management, business planning and
financial management, marketing, product research and development,
business ethics, information processing, corporate governance and
legal issues among others.
The Ministry will support and coordinate MSMEs training programmes by

business service providers. Organised training, attachments, hands-on technical
assistance, study tours and mentorship programmes involving national, regional
and international organisations to secure expertise and best practices will be
facilitated.
MSMEs will be assisted through the Business Links Office to network and
establish partnerships such as joint ventures, subcontracting and franchising at
local, regional and international levels.
4.8 Rural Industrialization
The Ministry will promote rural industrialisation and facilitate the

establishment of MSMEs rural industrial hubs with appropriate
technology to harness local endowments and to add value to local
resources.
Focus will be directed at the rural population to venture into innovative and value
added employment generation projects that tap into indigenous knowledge and
resources endowed in various provinces.
4.8.1 Growth Points and Business Service Centers
Growth Points and Business Service Centers form the nucleus of the
development of small towns which have the potential to industrialize. In
rural areas the title deeds requirement to provide security over loans as
recommended by the Land Commission will be vigorously pursued.
4.8.2 Targeted Support
Targeted support will focus on rural, cluster based development, export

orientation, gender and youth mainstreaming.
4.8.3 Beacon Projects
The Ministry will encourage the setting up of beacon projects in strategic

areas to enhance industrialisation process by MSMEs. Beacon projects will
facilitate employment creation, wealth generation, poverty alleviation and
contribution to economic development. The model beacon projects will be
based on each provincial comparative advantage.
Pic. 15 : Fisheries in Binga
4.9 Market Development and Trade Promotion
The Ministry will facilitate the development of markets, locally

and internationally, taking advantage of regional and
international trade protocols.
4.9.1 Market Development
(a) Marketing and Distribution
MSMEs will continue to be assisted to develop effective marketing

strategies and distribution networks. Demand driven product
development will be encouraged among MSMEs. Periodic markets,
vendor marts and highway market stalls will be encouraged and
developed to give MSMEs marketing opportunities
(b) Business Linkages
The Ministry and stakeholders will promote forward and backward

linkages for MSMEs to access markets, technology, innovation and
skills training by facilitating subcontracting, franchising, joint
ventures and other forms of linkages.
(c) e – Marketing
The Ministry will promote the development and use of e-

marketing to identify markets and market requirements.
Promoting the adoption and application of Electronic
Commerce by MSMEs will enhance their competitiveness in
the global village.
(d) Market Intelligence
Information on market trends through industry sector

studies will provide market intelligence on opportunities to
MSMEs. In this regard Chambers, Business Associations and
ZimTrade will continue to provide technical assistance to
increase MSMEs market knowledge.
4.9.2 Trade Promotion
In creating a facilitative trading environment, procedures for

exporting and importing will be simplified and costs minimised.
4.9.2.1. Local Trade
(a) Local Trade Issues
The Ministry will facilitate the development of internal inter

regional markets and production of basic commodities to
promote the local trade. The Ministry will advocate for the
introduction and implementation of a quota system for
MSMEs on government procurement and contracts. The
Ministry will advocate for the protection of indigenous
MSMEs investment in retail and non-financial capital
intensive undertakings.
(b) Tax Relief and Breaks
The former SMMEs Policy agitated for small businesses to be

accorded tax relief, this strategy is still relevant. Tax reliefs
and breaks will be used as incentives to companies that
subcontract MSMEs or ―business angels‖ that provide funds
to the sector. MSMEs should also have a lower corporate
and capital gains tax rate. There will be need for giving
MSMEs a grace period on taxation during their start-up
phase. Tax incentives can be used to encourage graduation
from informal to formal sector. To widen the tax base, a flat
rate tax or tax band system is recommended for use for the
informal or micro and small enterprises.
4.9.2.2. Regional and International Trade
(a) Trade Protocols and Agreements
MSMEs will be urged to take advantage of bilateral and multi

lateral agreements within the region under the SADC,
COMESA, African Economic Community (AEC), and
international Protocols.
(b) Look East Policy
The Ministry will move towards the development of new

sustainable MSMEs markets by taking advantage of existing
market opportunities in the Far East through exploitation of
supportive trade policies. The Look East Policy and
multilateral trade agreements will consolidate available
market opportunities for MSMEs.
(c) Review of Customs Duties and Tariffs
The Ministry will constantly lobby for a review of the
Customs
Duty and Tariff Regime to ensure that MSMEs are able to
import raw materials cheaply, manufacture and sell products
at competitive prices locally and internationally. Schemes
such as the duty draw back systems and the inward
processing schemes will function efficiently and their
administration decentralized in all regions. The Ministry will
lobby for constant tariff regime review to respond to
changing domestic and international circumstances and
simplification of procedures and processes at border posts.
Pic. 16 : SME exhibiting at ZITF
4.10 Investment Promotion
A conducive investment environment is a prerequisite for

sustainable MSMEs development. Strategies that promote
investment in this sector will be pursued.
(a) Rebates and Discounts:
High cost of utilities and services prohibit MSMEs investment. The
Ministry will endeavor to identify incentives local authorities can use to
encourage MSMEs to establish businesses and to register them. Rebates
on rates or discounts on land and services, for example, can present an
attractive incentive for MSMEs investors. Local Authorities will be
encouraged to reinvest a percentage of revenue collected from MSMEs in
activities that promote MSMEs development.
(b) The Zimbabwe Investment Authority
The establishment of the Zimbabwe Investment Authority as a One

Stop Shop will minimize the regulatory burden of starting a business in
Zimbabwe. It is recommended that the Authority open MSMEs windows to
facilitate joint ventures with MSMEs by external investors and attract FDI
within the sector. MSMEs are encouraged to take advantage of
opportunities that come with the facility.
(c) Private, Public Partnerships (PPPs)
The private sector investment especially in infrastructure development

will be encouraged and facilitated with the involvement of the Ministry of
Local Government, Public Works and National Housing.
4.11 MSMEs Financial Support
The Ministry shall facilitate access to funding and creation of

financial intermediaries to cater for the needs of MSMEs.
Measures will be taken to increase the capacity of identified
financial institutions participating in the development of MSMEs.
Issues of gender mainstreaming and flexible collateral
instruments will be imbedded in the lending programmes.
The Ministry will mobilise appropriate domestic and external lines of

credit.
4.11.1. Restructuring and Recapitalisation of SMEDCO
SMEDCO will be restructured and recapitalised to enable it to

effectively carry out its mandate. SMEDCO will operate financing
schemes in accordance with Part IB of the Act, to provide funds for
on lending to MSMEs.
4.11.2. MSMEs Revolving Fund
The MSMEs Revolving Fund will be capitalised to meet

MSMEs’ financial demands. It is imperative to introduce an MSME
Development Levy with contributions from the corporate world and
the MSMEs to capitalise the fund.
A wholesale finance scheme will be established within the MSMEs

Revolving Fund to provide resources to those who lend to micro
projects. Group lending will be encouraged to cater for micro-
enterprises.
4.11.3. Credit Guarantee Schemes and Credit Finance
The Ministry will encourage the establishment of Loan

Guarantee Schemes for MSMEs to access funding from financial
institutions to benefit those without equity and collateral security.
The Ministry will also facilitate the establishment of institutions that

provide MSMEs with unsecured funding at concessionary interest
rates. It will also continue to facilitate the introduction of incentives
for financial institutions that support MSMEs.
4.11.4. Financial Institutions
The Ministry will continue to encourage the setting up of

venture capital companies, micro finance institutions, participation
of business angels and development of other financial products
suitable for supporting MSMEs.
4.11.5. Savings and Credit Cooperative Societies (SACCOs)
The Ministry will continue to provide support for the

development of SACCOs within the MSMEs sector among others.
These institutions will inculcate a culture of savings, mop up excess
liquidity and provide alternative source of funding within the
MSMEs sector. Other sources of funding will include foundations,
mutual and trusts funds. MSMEs among them women, youths and
disadvantaged groups will be assisted to establish group insurance
schemes to mitigate risk.
4.11.6. Risk Capital
Risk Capital which includes private equity, business angels and

corporate ventures will continue to be promoted and supported.
The Ministry will continue to lobby for incentives, such as tax
breaks, particularly for those investing own equity into high growth
businesses.
4.11.7. Secondary Stock Markets
The stock market is an instrument for attracting investment

resources to the productive sectors of the economy. Establishment
of the Secondary Stock Market meant to boost investment within
the MSMEs sector will be pursued.
5.0 Cross Cutting Issues
5.1 Indigenisation and Economic Empowerment
The Indigenisation and Economic Empowerment Policy and Act

(Chapter 14:33) envisage inclusion of previously disadvantaged
indigenous people in the mainstream economy. The Act facilitates
access to economic areas previously dominated by large
corporates. MSMEs are therefore encouraged to form consortiums,
as one of the strategies, to benefit from the provisions of the Policy
and Act.
5.2 Gender Dimensions
The Ministry will ensure the mainstreaming of gender and

disadvantaged groups’ issues in all initiatives pertaining to MSMEs
development. The Policy will continue to develop and implement a
plan of action to promote and support women entrepreneurs and
the establishment of small and medium businesses by women. The
policy will take into consideration the different roles and
responsibilities of men, women, boys and girls in designing
programmes and projects.
5.3 Youth Development
A deliberate strategy to create an entrepreneurial culture and to
prepare youth for self-employment will continue to be pursued in
cognisance of development policies of relevant line ministries.
Introduction of entrepreneurship in the curriculum of primary,
secondary and tertiary education is meant to develop the
entrepreneurial culture. There is need to link graduates and school
drop outs to appropriate project skills and funding programmes.
5.4 Environmental Issues
The Ministry in partnership with the Ministry of Environment and

Natural Resources Development and the Environmental
Management Agency (EMA) will facilitate environmental awareness
and compliance. A review of EMA tariffs for MSMEs environmental
evaluation and compliance is recommended.
5.5 HIV and AIDS
The Ministry shall continue to implement and review the MSMEs

HIV and AIDS policy to mitigate the spread of HIV and AIDs in the
sector.
6.0 Institutional Frameworks and Policy Coordination of the MSMEs

sector.
The SMEs Act (Chapter 24:12) will help to rationalise the institutional
framework as it defines roles and responsibilities of relevant institutions
and organisations involved in the development of MSMEs and ensure that
all efforts are properly coordinated.
6.1 Ministry of Small and Medium Enterprises and Cooperative

Development
The Ministry’s institutional capacity will be strengthened through the

provision of adequate resources to ensure effectiveness. The focus of the
Ministry’s support to MSMEs will be catalytic, promotional, facilitative and
analytical in nature.
6.2 Small and Medium Enterprise Development Corporation
(SMEDCO)
The Ministry has SMEDCO as its fund disbursement arm. Apart from
providing start-up funds for MSMEs and funds for growing businesses,
SMEDCO will continue to provide capacity building for MSMEs and come
up with other support schemes for the sector in accordance with the SMEs
Act.
6.3 Small Business Advisory Council (SBAC)
The Small Business Advisory Council will be established with

representation from the public and private sector as prescribed in the
SMEs Act to advice the Government, local authorities, SMEDCO and other
statutory bodies on issues relating to MSMEs. The SBAC will act as the
eyes and ears of the MSMEs and the Government.
6.4 Small Business Development Service Bureau (SBDSB)
The SBDSB will be established to mobilise private sector players to jointly

provide business extension and advisory services. The SBDSB will
establish a Small Business resource centre to provide the following
services among others:
 Business counseling and training;
 Legal advice
 Brokerage and referral support.
 Accounting
6.5 Public and Private Sector Institutions
The Ministry recognises the contribution of the public and private sector
institutions to MSMEs development. The Ministry will ensure that these
efforts are well coordinated and beneficial to all concerned.
6.5.1 Public Sector Institutions
(a) ZimTrade
The Ministry will continue to work with ZimTrade to
support MSME exporters. Matching grants and training will enhance
the capacity of exporters. Comprehensive market intelligence on a
sector basis is critical.
(b) Standards Association of Zimbabwe
The institution will assist MSMEs to appreciate the need for

quality assurance as well as provide targeted support to MSMEs
aspiring to achieve international quality standards.
(c) Zimbabwe Intellectual Property Office (ZIPO)
ZIPO will continue to assist MSMEs to appreciate the

importance of intellectual property rights. MSMEs will be
encouraged to patent their products. Capacity building programmes
for MSMEs will continue to be implemented.
(d) Scientific Industrial Development and Research Centre

(SIRDC)
SIRDC will continue to be the focal point for the provision of

comprehensive information on new technologies. SIRDC will assist
MSMEs to access technology and product design and development.
(e) Zimbabwe Investment Authority (ZIA)
The Zimbabwe Investment Authority, a one-stop shop, will play a

key role in promoting investment.
6.5.2 Private Sector Institutions
(a) Financial Institutions
Financial institutions will be encouraged to continue to provide
financial products that are MSMEs user friendly.
(b) Zimbabwe Chamber of Small and Medium Enterprises
The Ministry recognises the important role played by the Chamber.

The Chamber provides a platform for Micro, Small and Medium
businesses to network, pool their resources, create market power,
strengthen advocacy and establish a unified voice for the
development of an enabling environment.
(c) Other Business Associations
Entrepreneurs will be encouraged to establish sector focused

Associations and/or affiliate to Zimbabwe Chamber of SMEs,
Zimbabwe National Chamber of Commerce (ZNCC), Confederation
of Zimbabwe Industries (CZI) and Zimbabwe National Chamber of
Mines (ZNCM) among others to facilitate networking and access
support packages targeted to the sector.
7. Action Plan and Implementation Strategy
An Action Plan and implementation strategy with short, medium and long
term interventions and also an extrapolation of the Five Year Strategic
Plan (2011 – 2015) is spelt out as a separate appendix to the policy
document. The plan provides for milestones, benchmarks, accountability
and monitoring mechanisms.
8. Monitoring and Evaluation
The responsibility to ensure that the MSMEs Policy Framework is

implemented and is achieving the desired results will lie with the Ministry
of Small and Medium Enterprises and Co-operative Development. Annual
strategic retreats and workshops with stakeholders will be held.

Ministry of Small and Medium Enterprises and Co-Operative Development

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MINISTRY OF SMALL AND MEDIUM ENTERPRISES

AND CO-OPERATIVE DEVELOPMENT

NATIONAL MICRO, SMALL AND MEDIUM ENTERPRISES POLICY FRAMEWORK

Content Page Number

Table 1 Classification of MSMEs 14

Table 2 Definition of MSMEs based on points 19

Pic. 1 : MOU with International Rescue Commission (IRC) 9

Pic. 2 : Arts and Craft National Handicraft Centre 9

Pic. 3 : MSMECD equipment installed at HIT 10

Pic. 4 : FinScope Survey Commissioning Ceremony 10

Pic. 5 : MSMEs working shelters in Hatcliff 12

Pic. 7 : Arts and Culture 15

Pic. 8 : Mining and Quarrying 16

Pic. 14 : His Excellency The President of the Republic of

Pic. 15 : Fisheries in Binga 27

Pic. 16 : MSME exhibiting at ZITF 30

MSMECD Ministry of Small and Medium Enterprises and Co-operative

SMMEs Small, Micro and Medium Enterprises

MSMEs Micro, Small and Medium Enterprises

SMEs Small and Medium Enterprises

SBAC Small Business Advisory Council

SEDCO Small Enterprises Development Corporation

SMEDCO Small and Medium Enterprises Development Corporation

NGO Non-Government Organisation

STERP Short term emergency recovery programme

SIRDC Scientific and Industrial Research Development

SAZ Standards Association of Zimbabwe

SADC Southern Africa Development Community

COMESA-STR Common Market for Eastern and Southern African – Simplified

IRC International Rescue Committee

MTP Medium Term Plan

MDGs Millennium Development Goals

ZIMASSET Zimbabwe Agenda for Sustainable Socio-Economic Transformation

ZIMSTATS Zimbabwe National Statistical Agency

ZIMTRADE Zimbabwe Trade

ZIMRA Zimbabwe Revenue Authority

PPPs Public Private Partnerships

PPDs Public Private Dialogue

FOREWORD BY HIS EXCELLENCY

The micro small and medium enterprises sector

The main thrust of the MSMEs policy is to have in

I therefore urge all stakeholders particularly Government including Local Authorities,

His Excellency, R.G. Mugabe

Government in the post 2013

Hon. Sithembiso G.G Nyoni

It is also important to appreciate that the Zimbabwean economy currently comprises

I acknowledge the extensive consultative process undertaken involving Government,

Hon. Sithembiso G.G Nyoni

It is envisaged that the Policy shall:-

 Enhance the creation and maintenance of an enabling legal and regulatory

 Facilitate coordination of different policies and programmes at national level;

 Provide an appropriate institutional mechanism to facilitate MSMEs

 Coordinate resource mobilization strategies and set priorities to ensure

 Rationalize and coordinate support programmes;

 Delegate tasks, responsibilities and accountability to all the stakeholders; and

Once the reviewed MSMEs Policy is approved by Government, a matrix of Beacon

1.1 MSMEs Contribution to the Economy

In the Zimbabwean context, the MSME sector is considered to be a major player in

There is awareness in Zimbabwe that development of MSMEs is crucial for the

1.2 International Outlook

 Provide around 50% of productive employment, (UK: 45%, EU: 66%,

1.3 Achievements from the SMMEs Policy Framework 2002 to 2012