An assessment on the role of Financial Institutions on growth and development of Small and Medium Enterprises: A survey in Harare town
- Author
- Pasipamire, Tash S.
- Title
- An assessment on the role of Financial Institutions on growth and development of Small and Medium Enterprises: A survey in Harare town
- Abstract
-
The main objective of this research was to assess the role played by Microfinance Institutions
(MFIs) in promoting the growth and development of Small and Medium-Sized Enterprises
(SMEs) in Zimbabwe. Expert or judgmental and convenience sampling were used in selecting
SMEs which fall under the Ministry of Small and Medium-Sized Enterprises definition. The
same sampling methods were employed as well in choosing registered and licensed MFIs in
Zimbabwe. Stratified sampling was adopted to select 50 SMEs and 45 MFIs to participate in
the study. Data was collected via a questionnaire and interview and the presentation of data
was done in the form of tables, pie charts, graphs and interpretation made based on research
objectives. Two set of questionnaires were designed to facilitate the solicitation of credible
and appropriate data which was used for analysis. One set of questionnaires was done for
SMEs and another one for MFIs. Sequential exploratory research design technique was used.
Analysis was done by Statistical Packages for Social Sciences (SPSS version 21.0). Data
presentation and analysis was done by tactically using percentage graphs such as histograms
and pie charts. The outcome of the study indicates that almost all MFIs support SMEs
financially with expensive loans and short tenures. Although they are challenges being faced
by SMEs, MFI services increased the growth of SMEs in terms of sales among others thus a
positive relationship between MFI services and growth of SMEs. Whilst SMEs recognize the
positive role played by MFIs, they however lament the stringent requirements imposed on
them by MFIs. Besides the financial assistance, it is recommended that MFIs should try to
waive some of the requirements such as collateral security. The interest rates should be lower
than that of other financial institutions so that the poor may be incorporated into the system
since the aim is to cater for the poor. Government and MFIs must find ways of providing
cheaper funding and offering training programs that suite SMEs in Zimbabwe so as to
improve the viability of SMEs and our economy as a whole. - Date
- December 2022
- Publisher
- BUSE
- Keywords
- Financial Institutions
- SMEs
- Supervisor
- N/A
- Item sets
- Department of Accountancy
