Abstract: The study sought to establish the reasons behind the failure by the existing Small and Medium Enterprises (SMEs) to grow and develop into productive economic entities to become the engines of growth and development in Zimbabwe. The proliferation of SMEs, started soon after the demise of big firms in the country, was viewed as the best option if the nation was to reclaim its former position as a rapidly developing country. The researchers carried out a qualitative research that sought the perceptions, experiences and views of SME operators, mainly those who went past the 5th year of operation and should have embarked on a growth trajectory; enhanced production, increased numbers of employees and annual turnover. The population was composed of SME operators in the City of Harare and who occupied rented office accommodation and had a strong reason to grow and proceed beyond just survival. The sample composed of purposively selected SME owners and operators who were engaged in interviews and focus group discussions. The data generation process reached a point of saturation with the eleventh interview and three discussion groups. The major finding was that most owners and operators started SMEs as an innovative survival strategy when theywere retrenched from companies that liquidated their businesses due to the hyperinflation of 2007-2009; they were never meant to grow but to provide a livelihood for the owners, who were averse to growth loans. Those that desired to grow were constrained by lack of credit or affordable funding sources,they operated in a restrictive regulatory environment and they did not have, at their disposal, a support mechanism, like mentorship by successful operators. The other reasons for failure to grow included a phobia for bad debts, lack of transport, scarcity of operating space, inadequacy of raw material and fear of natural disasters for those in the agricultural sector. The main recommendation was that the government could put in place a private SME Funding Authority that received a budget from government and funds from other sources, like donations, for lending out at very competitive interest rates, and purely on business considerations. The other recommendation was that other researchers could pursue the suggested funding method and suggest how to operationalisethe Authority to the best advantage of the SMEs. The conclusion was that the available empirical evidence indicated that, if afforded adequate support, SMEs could be the engine of economic growth and development to the nation.
Keywords: growth, development and engine.
Title: Small and Medium Enterprises: Engines of Growth for Industrialisation and Modernisation
Author: Dr. Caxton Shonhiwa, Stanley Idanai Murangwa
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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