AfricaBusiness & FinanceZimbabwe

Lack of funding seen as a major obstacle by Zim start-up founders

By Almot Maqolo

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Lack of access to finance is one of the major stumbling blocks limiting Zimbabwe’s start-ups growth potential, a new report shows. The report was done by Tech Hub Harare and titled Zimbabwe Start-ups against Covid-19 2020.

Tech Hub Harare launched a survey in which it targeted to receive 100 responses and generally expected startups to confirm that there are few programs targeting Zimbabwean startups and that the ecosystem is falling short of their expectations.

It is also expected to find out that local startups generally fund their ventures from their own resources and find it difficult to access funding from Banks, government programmes.

Tech Hub invited startups to take up the survey over a 2 month period. But, the response was lower than expected but not surprising.

Despite it reaching out to over 300 startups engagement is low because Zimbabwean startups are very shy and skeptical of such surveys.

Albeit not asking the start-ups to reveal their identity, only 28 start-ups out of an expected 300 startups responded, a 10% response rate.

Tech Hub Harare said 74.1% felt that lack of finance was a show stopper followed by rapid changes in the operating environment. Also 48% felt that rules change too quickly in Zimbabwe and this affects their businesses negatively.

About 44% also felt that domestic regulation and Bureaucracy were a major threat for future development.

“Despite the harsh economic climate the majority of start-up founders dug from their own pockets to invest in their ventures.”

India has over the years successfully used matching grants to help start-ups grow to the next stage of their growth phase. Zimbabwe recently announced a Venture Fund and can utilise 10% of the fund to offer matching grants to start-ups and help them grow.

“Once such a support mechanism is in place many founders will venture out and know that once they reach certain milestones they can access such grants,” reads part of the report.

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