An investigation into the challenges faced by SMEs in obtaining finance in promoting investment. A case study of Chitungwiza (Makoni) SMEs.
- Author
- Veterai, Israel
- Title
- An investigation into the challenges faced by SMEs in obtaining finance 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, and 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
- December 2022
- Publisher
- BUSE
- Keywords
- SMEs
- Financial institutions
- Supervisor
- Mr. Chiriseri
- Item sets
- Department of Accountancy