Core foundation and SNV hosted the second steering committee workshop attend by NSSA, World Bank, ZIMRA, Silveria House together with the local authorities who were to deliberate on how to formalize the SME sector.

Addressing the stakeholders Minister of Small to Medium Enterprise and Cooperative Development Sithembiso Nyoni said , Government and world bank are close to finalizing the approach which will be used in the formalizing the small enterprises sector. Minister Nyoni said the small to medium sector is largely informal with 85 percent being unlicensed operators. This she said had led to the lack of financial support from Government institutions and banks. She said the drive for formalization is best timed as it is in line with Zim- Asset which aims to improve the business environment.

The SME Act Chapter24:12 stipulates that a quarter of registered entities should promoted through getting tenders as well as financial support. “ It is from this workshop that we need to come up with solid steps and commitments to facilitate smooth transition from the informal to the formal sector” , she said.

Core Foundation Founder, Mr Alvin Nyika, a Global Shaper of Harare Hub at the same event said , different stakeholders should come together and work towards finding sustainable ways and strategies to push forward the agenda for formalization of the sector. “ There’s still huge potential to develop and grow the SMEs sector become formal, the 2,8 million SMEs have created 5,7 million jobs which means its still a market that needs to be tapped into” he said.

Informality plays a significant role in such circumstances, especially in income generation, because of the relative easy of entry and low requirements for education, skills, technology and capital. But people enter the informal economy not by choice, but out of need to survive and to have access to basic income generating activities. However for the SMEs sector to make substantial contribution to the mainstream economy it needs to be ted into the mainstream economy by formalizing business entities.

Formalization can be defined as registration and or licensing of an economic activity under the laws and regulations of the land a business is operating from. Small and Medium Enterprises in Zimbabwe face challenges in formalizing their business. There still remains little knowledge about how the formalization process can be simplified to encourage most MSMEs to formalize. The study intends to research on challenges to formalization focusing on the ten provinces of Zimbabwe with the intention of providing recommendations on how the formalization process can be eased.