THE Registrar for Co-operatives has issued a warning against elements ripping off members of the public masquerading as agents of their office who are threatening the success of the formalisation of the Small and Medium Enterprises (SMEs) sector.
As the Ministry of Small and Medium Enterprises and Co-operatives Development intensify efforts to formalise the SMEs sector, bogus elements have surfaced, fleecing people wanting to register as co-operatives.
“There are members of the public masquerading as working on behalf of the Registrar of Co-operatives and siphoning money from prospective co-operators,” said the Office of the Registrar in a statement.
The Ministry would like to warn such undesirable elements of the society that the law will take its course on them soon.”
The application fee for registration of a co-operative is currently pegged at US$10 and is deposited in the Co-operatives Central Fund.
To avert being ripped off, the Registrar of Co-operatives said the public had to adhere to laid down procedures of registration.
Among requirements for registrations are that an application is signed by:
“In the case of a primary society, by at least 10 persons intending to become members; in any other case, by persons authorised to do so by the society concerned.”
In addition an application must be accompanied by, among other things:
“Three copies of the proposed by-laws, or such greater number as the Registrar may require, signed by all the persons authorised to sign the application, a record of the resolutions made at the proceedings of the preliminary meetings, if any, signed by all persons who attended such meeting and intend to be members.”
Where officials solicited for bribes for co-operative registration or any administrative task, the Registrar urged ‘such behaviour to be reported immediately to her office or the nearest ZRP, Anti-Corruption Commission offices and Inspectorate Agency of the Public Service Commission’.
The Micro, Small and Medium Enterprises (MSME) sector has become the engine of the economy, employing the largest number of people after the Civil Service.
A Finscope MSME survey cited that the country has 2,8 million MSME owners, employing 2,9 million people, translating into 5,7 million people dependent on the sector contributing more than 60 percent to GDP.
“In Zimbabwe, informality is one of the major challenges facing the small business with 85 percent of the MSMEs not registered or licensed,” read the Finscope report.
According to players in the sector, hindrances to formalisation include regulatory barriers, financial requirements, labour laws, corruption and socio-cultural barriers.
Regulatory barriers cited include requirements for multiple reporting, inspection and other compliance procedures.
These burdensome and costly Government regulations were said to be the determinant of informality and a cause for corruption.
The SME players were also shunning the formalisation route due to high financial requirements.
Cited financial requirements barriers consist of regressive fees that penalise smaller firms, overly complex tax regulations and poor tax as well as tariff administration.
Since offices have not been decentralised, the players also complained of having to travel to the capital or other distant towns to conduct these procedures.
SMEs Minister Sithembiso Nyoni said sustainable economic development was hinged on fully supporting and formalising the sector.
“Many times when we talk of economic development in Zimbabwe, the discussion veers off towards visions and contemplation of huge factories, billion-dollar mining investments, hyper shops and towering buildings in our town centres.
“Yet what we need to learn and appreciate is that the big and billion-dollar investors in mining, property and technology sectors started as informal, micro, small and medium enterprises,” said Minister Nyoni.
The small players, she said, could not grow into significant entities without support.
“For example facebook and Apple started as informal and small enterprises that received support in various ways to grow into international giants,” she said.
“The SMEs sector,” she said, “was the starting point towards inclusive economic development and growth”.
According to the Minister, formalisation will focus on infrastructure, labour by-laws, taxation, technology, working space, financing and networking.
“The MSMEs Ministry wants to see rules working for the sector. There is engagement of other line Ministries, Government departments such as tax authorities, local authorities, traditional leaders and the banking sector, among others.
“Micro, small and medium business sectors have to graduate into competitive established companies taking over from regional and international players. It is the MSMEs sector that cushioned us in the difficult 2004 to 2009 period and it is the same sector that continues to cushion many millions,” said Minister Nyoni.