An evaluation of the policy and strategy framework for SMEs in Zimbabwe.

Abstract

Small and Medium Enterprises (SMEs) are important to economic growth and employment creation however they are faced by numerous challenges. Government intervention through SME policies is necessitated by the challenges which are seen as market failure. In Zimbabwe there is the National Policy and Strategy for Small and Medium Enterprises formulated in recognition of the importance of SMEs and to alleviate the challenges they face. However in spite of the SME policy small businesses are still faced with many challenges therefore this study evaluates the National Policy and Strategy for SMEs in Zimbabwe to ascertain the steps that have been taken by the government to develop SMEs. The study evaluates the SME Policy in Zimbabwe using the seven elements by the Organisation for Economic Cooperation and Development (OECD). A mixed methods research approach was adopted employing both quantitative and qualitative research methods to gather data. The target population was divided into two groups which were nine hundred and forty-five (945) SME operators and fifteen (15) experts in the Central Business District of Harare Zimbabwe. A sample size of two hundred and seventy-two (272) SME operators was determined using Krejcie and Morgan’s Sample Size Calculator and the sample size for experts was fifteen (15). Questionnaires were handed out to SME operators and interviews were conducted with experts to validate the responses from questionnaires. Using the Statistical Package for Social Science (SPSS) IBM 23.0 data gathered through questionnaires was analysed and using content analysis data from interviews was transcribed. This study found out that challenges faced by SMEs prior to the National Policy and Strategy for SMEs in Zimbabwe were still prevalent after its formulation. The objectives of the SME policy are yet to be met as SMEs cite the regulatory framework as challenge, most small businesses find it difficult to register their businesses and to access government guaranteed loans. Although there is the Ministry of Small and Medium Enterprises and Cooperatives Development to implement the policy most SMEs are of the view that it is inaccessible and underfunded to function.