Business
Local firms shun investment as developers delay payments
In the construction or real estate industry,
Picture: Zambian Business Times
In the construction or real estate industry, sometimes developers request for companies to invest resources and later pay when the project is completed.
One of the key advantages is the prevention of projects from stalling due to a lack of resources, and the companies that engage in the development are likely to attract more clients.
However, construction expert Samuel Makina has revealed that local firms are shying away from investing in projects due to the trouble associated with delayed payments.
Makina, who is also the director for SMAC Construction Company, added that there are several cases of companies that take their clients to court over delayed payment. Makina revealed that most of the companies are opting for a 50-50 investment instead of outright in order to protect themselves.
“Most of the time when you are instituting a bigger project, you have to invest in it. You can agree on that, but the challenge is that the client fails, but the challenge is that when you invest much, you can face some resources where a client does not pay the money, and this is the current challenge for most companies,” he added.
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At the height of such complaints, this is likely to affect the investment in new projects and slow development. Some projects may remain unfinished, especially on the part of clients who rely on contract financing.
Inasmuch as this is not applicable to certain firms with adequate financing, lower-class firms are being injured the most.
Article by Samuel Mutale
Source: Zambian Business Times — Read more
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