Measuring The Effectiveness Of Microfinance Institutions Towards The Development Of Small To Medium Enterprises: Case Of Harare · Electronic Theses and Dissertations

Author

Mishell W Rwanga

Title

Measuring The Effectiveness Of Microfinance Institutions Towards The Development Of Small To Medium Enterprises: Case Of Harare

Abstract

This study was concerned with the support being offered by Microfinance Institutions to Small to Medium Enterprises in Zimbabwe. The center of the issue was to establish whether Small to Medium Enterprises were benefiting from the services being offered by Microfinance Institutions. In order to fully conduct the research, the student involved management and employees of FMC Finance and SME owners in the city of Harare. The research design mainly used was descriptive research design, qualitative and quantitative methods were also used. The descriptive design was found to be the most appropriate for this study because it was capable of capturing the respondents’ beliefs, conceptions and attitudes in relation to the contribution of microfinance institutions’ support for the growth and development of SMEs in Zimbabwe. Questionnaires and interviews were used to collect data. The average response rate was very high though the researcher faced some challenges of limited resources and access to confidential data. The major findings were that Microfinance institutions were failing to provide support to small to medium enterprises in Zimbabwe due to lack of security. Collateral was the dominating feature conditional to the advancing of loans to SMEs for their growth and development. The conclusion of the study was that SMEs were a potential liability to funders owing to their lack of collateral and poor accounting practices. Despite the high risk of the business, the market potential was there, and therefore support should be given to potential business operations in small to medium enterprises. The study recommends that the regulatory authorities must consider the services of SMEs and create a fund meant to assist SMEs in their growth and development initiative. The sector creates employment for the majority of Zimbabweans, and therefore it is crucial for the state to establish the need and expansion of SMEs. Financial Institutions may also introduce a fee or subscription for all SMEs with the intention of acquiring a loan from the bank. The fee motivates Home SMEs to pay some money to the bank and contribute towards the creation of a pool of funds for loan advances.

Date

2022

Publisher

BUSE

Keywords

Measure

Effectiveness

Development

Supervisor

MR CHITOMBO