Harare — GOVERNMENTS and other stakeholders should ensure micro-credit is accessible to the poor to establish small businesses and fight poverty, President Mugabe said yesterday.

Cde Mugabe said in many countries, including Zimbabwe, micro-finance had proved its value as a weapon against poverty and hunger.

"With access to micro-finance, ordinary but hardworking people can earn more, build up assets, and protect themselves against unexpected setbacks and losses through savings and small loans," he said.

The President was officially opening a regional workshop on measuring the performance of micro-finance institutions at the Rainbow Towers.

When assisted with micro-finance, people can move beyond day-to-day survival and attain the capacity to better plan for the future and invest in better housing, improved health and better education, said Cde Mugabe.

"It is the duty of governments and that of all stakeholders in the development process, to make micro-credit a tool to reach the 900 million people who make up the world's poor."

Cde Mugabe said given the relationship between poverty and gender, which leaves women and children to bear the brunt of poverty most, micro-finance provided realistic opportunities to create jobs for them and their children.

Women were generally honest and focused borrowers who valued repaying loans.

President Mugabe said to meet the Millennium Development Goal of "promoting gender and empowering women", more resources should be channelled to micro-finance institutions.

"SMEs are key to our survival, the bulk of our people rely on SMEs," he said.

With the need for diversification, capacity building and lesser donor dependency, it was important to transform and integrate the micro-finance sector into the formal financial system.

Cde Mugabe bemoaned the misconception in developing countries that all poor clients were risky and less profitable.

"A paradigm shift is, therefore, needed for us to recognise that poor people are not a liability, but an untapped resource and potential contributors to economic development."

He said the growth of micro-finance institutions must be regulated to ensure good corporate governance, accountability and professionalism.

Cde Mugabe said Zimbabwe regarded the micro-finance sector seriously and had placed them under the ambit of the Reserve Bank of Zimbabwe.

Four micro-finance institutions were selected to participate in the recent $16 billion RBZ SME facility, through which they got money for on-lending at concessionary rates.

"My Government will not be found wanting in the effort to assist the micro-finance sector to increase its outreach, fight poverty, boost micro-enterprise activities and ultimately enable the sector to contribute effectively towards the country's overall economic performance," said President Mugabe.

RBZ Governor Dr Gideon Gono said realising the importance of the micro-finance sector, the central bank moved in to ensure discipline because prior to 2004 there was indiscipline and underhand business practices, which threatened the soundness of the financial system.

To date, the central bank has registered 257 micro-finance and money-lending institutions.

Dr Gono said the four institutions it chose to disburse the SME facility, paid out a sum of $7,261 billion, which was 45 percent of the total amount of $16 billion.

"These micro-finance institutions extend small loans to entrepreneurs too poor to qualify for traditional bank loans. The micro-finance sector has bridged the gap that formal banks have previously ignored and has proved to be an effective vehicle for achieving social and economic empowerment," he said.

Dr Gono took the opportunity to announce that the central bank would make available another $16 billion for lending to SMEs.

The Minister of Small and Medium Enterprises Development, Cde Sithembiso Nyoni, said Zimbabwe had scored a first in Africa by establishing a fully-fledged ministry for SMEs.

She said her ministry was creating the businesspeople of tomorrow because from the backyard and other small operations, SMEs would grow into giant participants in the economy.

Representatives from Benin, Ethiopia, Kenya, Namibia and Zimbabwe are attending the workshop.