The Impact of bank lending on the growth of SMEs in Zimbabwe. A case of Bindura

Author

Masiya, Marcia

Title

The Impact of bank lending on the growth of SMEs in Zimbabwe. A case of Bindura

Abstract

This research study is an investigation directed towards determining the impact of bank lending on the growth of SMEs in Zimbabwe. The main objective of the study is to assess the impact that bank lending has on the growth of SMEs in Zimbabwe, determining the challenges that are being faced by SMEs in accessing credit from banks, to explore the role in which the accessibility to bank loans enhances the performance of Zimbabwe's small and medium-sized businesses as well as to identify the principal obstacles banks encounter when attempting to provide credit to Zimbabwean SMEs. A mixed approach of questionnaires and interviews was adopted for data collection. The study found out that bank lending is making a positive impact towards the overall growth and performance of SMEs in Zimbabwe. Those who have managed to access credit from banks are able to develop their businesses in terms of infrastructure, purchasing better equipment and dealing with better suppliers which is leading to them producing standardized goods and services that attracts more customers. The study also reviewed that access to financial services for SMEs in Zimbabwe remains low. The informalization of the SME sector, customers’ financial illiteracy and lack of training, lack of collateral security for loans, a high non-performing loans ratio, the lack of understanding of SMEs’ needs by banks, the inaccessibility of banks and the general lack of financial innovation are some of the major reasons for the low level of SME financing. The researcher suggested that the researchers in the future researchers should put more focus on how banks can improve their relationship with SMEs .This will help the banks, the economy of Zimbabwe and also the SMEs to grow and emerge since finance is one of the core organs for business survival

Date

October 2025

Publisher

BUSE

Keywords

Bank lending

SMEs

Bindura

Supervisor

Nil