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Zimbabwe: Challenges of Financing Small to Medium Enterprises

Zimbabwe: Challenges of Financing Small to Medium Enterprises

These SMEs typically account for bulk of all firms outside the agricultural sector, constitute a major source of employment and generate significant domestic and export earnings. As such, SME development emerges as a key instrument in poverty reduction efforts. The importance of SMEs in Zimbabwe is identified economic blue print guiding the economy in the next five years identified one of its key strategies as fostering strategic linkages and formalisation among SMEs and cooperatives across all sectors of the economy.

SMEs, due to their size, are particularly constrained by limited access to finance, cumbersome bureaucratic procedures in setting up, operating and growing a business, poor state of infrastructure and lack of effective institutional structures. The removal of these constraints is a daunting task calling for holistic SMEs support, that is, an enabling environment for SMEs development consisting of functioning macro and micro level institutions.

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