An Investigation into the Challenges Faced by SMEs in Obtaining Finance from Financial Institutians in Promoting Investment. A Case Study of Chitungwiza (Makoni) SMEs · Electronic Theses and Dissertations

Author

Veterai, Israel

Title

An Investigation into the Challenges Faced by SMEs in Obtaining Finance from Financial Institutians in Promoting Investment. A Case Study of Chitungwiza (Makoni) SMEs

Abstract

This study sought to examine challenges that are faced by Makoni SMEs in Chitungwiza in
accessing financing from financial institutions to promote investment during the period 2019
to 2021. The objectives of the study were to establish types of financing currently available to
Makoni SMEs, to determine challenges being faced by SMEs operating at Makoni in accessing
financing from financial institutions and to suggest solutions for improving SMEs access to
financing. Primary data sources were used to gather the data needed. Descriptive research
design was used in carrying out the research and data collection was achieved using
questionnaire and Interviews. The population for the study was 150 SMEs in Chitungwiza
(Makoni Area). Probability sampling was used to select a sample of 70 SMEs operating in
Makoni Area. Analysis of data was done using Statistical Packages for Social Sciences (SPSS
version 29.0). The results of the study revealed that the Challenges faced by SMEs in accessing
financing are interest rates, inadequate collateral to secure loans, financial illiteracy,
competition from large firms and inadequate financial statements. The findings of the study
were presented using tables, graphs, and pie charts. It was concluded that interest rates,
inadequate collateral to secure loans, competition from large enterprises, and financial
illiteracy, accessibility to credit facilities are largely affecting operations of SMEs in Makoni.
The research recommended that the management of credit giving institutions should consider
lowering their interest rates as a way of encouraging MSEs to borrow from them. Also, merging
of SMEs in the same line of business to boost their sources of finance and to get rid of the lack
of collateral affect

Date

2023

Publisher

BUSE

Keywords

Financial Institutians

Finance

SMEs

Supervisor

N/A