Promotion of Small and Medium Enterprises (SMEs) in Zimbabwe through microfinance institutions (MFIs)

Abstract

The main objective of this research was to assess the role played by Microfinance Institutions (MFIs) in promoting 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. 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. 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. Whilst SMEs recognise 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. Government and MFIs must find ways of providing cheaper funding and offering training programmes that suite SMEs in Zimbabwe so as to improve the viability of SMEs and our economy as a whole.