An investigation into the perceived drivers of international remittances and their impact on Small-Medium Enterprises (SME) in Harare Metropolitan

Abstract

Remittances have received much attention in both regional and international development debates over the past years owing to their potential to stimulate development. The transfers to low-income countries of origin have presented resilient growth in the face of the recent economic downturn providing proof of their significance for many recipients in the developing world. However little attention has been given to the key drivers of remittances and their impact particularly on the growth and development of small and medium enterprises. The study sort to determine the impact of technology, cost of remitting, accessibility and government policies on the volume of remittances that can be received by SMEs. A quantitative cross-sectional research design was adopted and hinged on the positivist research philosophy. The study also adopted the deductive approach where hypotheses were deduced based on the knowledge that was gathered from existing literature on remittances and SMEs. The research adopted a survey research strategy where convenience sampling was used to sample 26 SMEs operating within Harare Metropolitan Province. The unit of analysis was the owners, managers and supervisors of the sampled SMEs. The data was collected using self- administered questionnaires. The collected data was then coded and analysed using the IBM (SPSS) version 23.The main policy implication from these findings is that there is need for effective policies to be implemented to boost the flow of remittances for investment purposes. This study results confirmed that the three perceived driving factors (technology, cost of remitting and accessibility) have a positive and statistically significant impact on the volume of remittances received by SMEs and it was on this basis that the study recommended authorities, SME owners, managers and supervisors to prioritize the cost of remitting, technology and accessibility in order to boost the volume of remittances received. The study also confirmed a negative and statistically insignificant impact of government policies on the volume of remittances received.