The glamour of the 2010 FIFA World Cup windfall for Zimbabwean SME businesses is likely to fall dramatically short of the expectations. Some SMEs, mostly those who export tourism services, may have borrowed some decent funds to renovate their accommodation, buy taxis and cars for hire, hoping tourists will flock the country and demand such services. From the onset, the Zimbabwean SMEs could have been aware that they would not benefit directly form the FIFA World Cup but hoping to cash in on some spill-over of FIFA world cup benefits. Now these spillovers may be too small for the kind of investments which could have been laid down. The fact is that many small businesses now stand to lose out as money spent on expansions and upgrades of hotels, lodges and restaurants may not be recouped during the month-long tournament Even in the hosting nation, South Africa, the hotel bookings are a little bit less than what was expected perhaps because the World Cup is coming in the wake of a global recession, among other reasons.
When faced with the reality of having sunk borrowed funds in anticipation of cashing in on World Cup spillovers, don’t despair. The first thing you need to do is to engage your Bank or the lender and explain the problem. Do not try to be elusive or difficult; rather engage the Bank management with constructive proposals to reschedule the repayment of the loan in line with what you may afford. The banking relationship has to be managed very well when your company is in financial distress.
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