Financial literacy lessons for vendors

Many workers from company executives to even the last person on the factory floor, always dream of becoming businesspeople when they finally leave employment. What only differs is the size of capital injected into the business.

These people, in the case of Zimbabwe, will join hundreds of thousands if not millions who are already in the informal sector. Besides, official statistics say small businesses, mainly family businesses, provide between 60 and 70 percent employment in the world.

Realising the centrality of small business in the economy, the Bulawayo Vendors and Traders Association (BVTA) has embarked on a financial literacy and business inclusion management drive with the thrust of capacitating members to grow and sustain their micro-enterprises.

BVTA executive director Michael Mdladla Ndiweni revealed there was a need to impart vendors and cross-border traders with requisite business management skills so as to grow their enterprises and enhance their livelihoods.

BVTA is a membership-based organisation established in 2015.

“We are conducting a series of capacity building training workshops on financial literacy and business inclusion management, targeting vendors and traders. The whole idea is to try and help them expand their businesses, identify business opportunities and also to improve their financial management, be it in vending, informal trading or cross-border trading. So, we are trying to give them the skills on how to effectively manage their own small enterprises,” he said.

BVTA is conducting the workshops in collaboration with the Bulawayo Progressive Resident Association with a Bulawayo-based micro-finance institution, MOB Capital (Private) Limited being its technical advisor.

Mr Ndiweni said the capacity building workshops are mainly targeting women as they comprise the largest numbers of vendors and cross-border traders.

“From the study, we carried out in 2017 we realised that a huge number of traders don’t have the (requisite) skills. You find a person has been having a small box of onions and tomatoes for the past 15 years and selling the same products, the same place and has never grown. It’s because they don’t know that they are in business.

“They (traders) are only doing it for subsistence, just to put a meal on the table. They never thought of growth but, of course, about 13 percent of those we managed to interview during our study said they had been driven by entrepreneurship passion. They want to grow and be like multinational corporations but some just do it for subsistence,” he said.

Owing to the closure of companies and downsizing of workers by most of the firms throughout the country due to sanctions-induced economic challenges, a number of people that were affected by the turn of events resorted to eking out a living through informal trade.

“Our hope is that when they are given these skills, they will realise their potential and maybe generate their ideas and improve and become fully-fledged business persons. We are trying to introduce them to a number of types of businesses such as sole traders, partnerships, cooperatives and private limited companies, among others.

“We are also introducing them to statutory requirements should one want to register a company. We are also encouraging them to pay their (vending) licences so that they don’t lose their goods to municipal police for selling on undesignated places without licences. So, we are encouraging them to have all the necessary paperwork,” said Mr Ndiweni.

Bulawayo City Council estimates that there are more than 7 000 vendors in the Central Business District with only a handful having heeded the local authority’s call to register and legalise their operations.

Mr Ndiweni said the roping in of MOB Capital was also meant to give its members access to capital to finance or expand enterprises although the objective was to encourage them to come up with their own self-financing initiatives.

“The reason why we are bringing in companies like MOB Capital and others is trying to leverage on their access to micro-finance or loans to support their businesses but also this training will encourage them to come up with their alternatives financing skills doing their own internal lending schemes, revolving funds, cooperative societies as an alternative from depending on loan sharks and micro-financers,” he said.

Last year BVTA developed a living Systems Map that ensures systems practice to analyse and understand the dynamics at play in the Informal Cross Border Traders (ICBTs) eco-system.

“We developed a Systems Map where we are saying all players in the ICBTs ecosystem must come together and try to incorporate solutions. Of late it has been a civil society that side, Government on the other side and the private sector on their side and other players on their own as well …,” said Mr Ndiweni.

MOB Capital managing director Mr Morris Mpala said the workshops are part of the efforts of formalising traders as well as facilitating their financial inclusion.

“As you are aware a lot of them are informal and we are just there to bring about their formalisation and then formalisation will always bring about financial inclusion because most vendors are part of the secluded part of the economy as it is. So, there is a need to bring them out and make them understand how business is run and how they can probably raise funds through pulling together…,” he said.

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