AfricaPress-Tanzania: ABSA Bank Tanzania is finalising the process of initiating a new product by the end of this year to serve small and medium entrepreneurs (SMEs) with affordable loans.
Absa Bank Tanzania Relationship Manager Farida Kamala revealed this plan during a special workshop that brought bank clients most of them being SMEs with businesses of a turnover range between 20m/- and 100m/- to educate them on critical issues related to financial management and help them grow to big businesses.
The bank organised the event in Dar es Salaam last week in collaboration with Deloitte that brought with it auditors, tax and finance experts to educate SMEs on critical issues they should consider to grow their businesses.
“The bank has delayed to come up with products Absa plans to introduce new SMEs product targeting SMEs due to shortcomings. We are finalising arrangements for a loan scheme for SMEs at least starting with those who manage a turnover of 50m/- annually. One needs to bank with us for at least six months to qualify for loans issued through this scheme,” she explained.
About 200 SMEs were brought together during the workshop and got exposed to knowledge to bridge a gap analysis in tax, audit, business plan, financial reporting and real time performance insights.
“Most of SMEs being start-ups or family businesses fail because of credit risk expenditure and lack of knowledge to manage limited revenue growth, maintaining business continuity and succession arrangements,” she said.
Addressing SMEs on tax issues, Mr Festo Bartholomew, Senior Manager Tax Deloitte, advised them on the importance of preparing and keeping accounting records of their businesses. He said most small and medium businesses failed due to delays in tax payment, hence creating accrued charges and penalties.
“One of the key facts to make your business grow big is filling provisional and income returns of every quarter even those of minor expenses related to the referred business. SMEs must build a culture of tax planning to determine your effective tax rate margin. Consultation of experts is needed to protect yourself from getting into problem with the revenue authority by incurring unnecessary penalties,” he warned.
