An assessment of the working capital management strategies of motor spare retail businesses in a hyperinflationary environment. A case study of SMEs in Harare CBD · Electronic Theses and Dissertations

Author

Melissah Wagusiwa

Title

An assessment of the working capital management strategies of motor spare retail businesses in a hyperinflationary environment. A case study of SMEs in Harare CBD

Abstract

The purpose of this study was to assess the impact of working capital management strategies
of motor spare retail businesses in a hyperinflationary environment using SMEs in Harare
CBD as a case study. The study's research objectives were to determine the impact of
inventory management on the performance of motor spare retail businesses in a
hyperinflationary environment, to investigate the effects of credit risk and accounts
receivables management on the profitability of motor spare retail businesses and to determine
effects of cash management and banking policies on the success of motor spare retail
businesses in a hyperinflationary environment. The research used both qualitative and
quantitative research approaches. The target population was 110 SMEs operating in retail
industry. As a research tool, 80 questionnaires and 30 interviews were used to collect primary
data. 65 out of 80 respondents answered the questionnaires showing a response rate of 81%.
25 out of 30 business owners were able to be interviewed also showing an 83% response rate.
The purposive and stratified samplings methods were used in generating data. The data was
analysed through descriptive and inferential statistics using SPSS and Excel sheets. Physical
counting of inventory and pre-setting an inventory level to reach before making orders were
found to be the most applied inventory management strategies. The research findings
indicated that debtors and cash receivables management strategies that were mostly applied
included follow ups on payments, limited access to cash drawers and thorough cash counts.
The study concluded that working management strategies overally had effects on the
performance, profitability, survival as well as success of SMEs. The study made
recommendations that SMEs should maintain proper records of their inventory and accounts
receivables which will assist in increasing business productivity. They should also formulate
credit policies for their customers to reduce the chances of default payments. Preparation of
budgets should also be utilised to prevent mismanagement of funds.

Date

June 2024

Publisher

BUSE

Keywords

working capital management strategies
Case study

SMEs
Harare CBD

hyperinflationary environment
Zimbabwe

Supervisor

N/A