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Determining factors that influence financial inclusion among SMEs: the case of Harare Metropolitan
Zimbabwe has been experiencing unprecedented levels of unemployment and high poverty. Against this backdrop, the growth of small- to- medium enterprises (SMEs) has been seen as a practical measure to help Zimbabwe's ailing economy address the complex macroeconomic challenges. However SMEs only recei...
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| Format: | Thesis |
| Language: | English |
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Research of GSB
2017
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| _version_ | 1867614531687022592 |
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| access_status_str | Open Access |
| author | Noor, Hanifa |
| author2 | Jere, Mlenga Golden |
| author_browse | Jere, Mlenga Golden Noor, Hanifa |
| author_facet | Jere, Mlenga Golden Noor, Hanifa |
| author_sort | Noor, Hanifa |
| collection | Thesis |
| description | Zimbabwe has been experiencing unprecedented levels of unemployment and high poverty. Against this backdrop, the growth of small- to- medium enterprises (SMEs) has been seen as a practical measure to help Zimbabwe's ailing economy address the complex macroeconomic challenges. However SMEs only receive 5% of total loans despite contributing 50% to GDP. This led to high levels of financial exclusion among the owners of SMEs, as banks cite credit risk as major challenge. Empirical evidence highlighted that 60% of the SMEs were financially excluded. This study explored the factors that influence financial inclusion of SMEs in Zimbabwe. This study analysed demand-side, supply-side and infrastructural constraints that inhibit financial inclusion. Demand-side factors of high transaction costs, financial illiteracy, and lack of confidence in the financial system and low levels of education resonated as issues among SMEs. On the supply side and infrastructural challenges: lack of widely accessible branches, information asymmetry, irrelevant financial products and service and high risk levels were the main deterrents within the financial sector. The population for the study was the Zimbabwean banking sector that comprised of 10 financial institutions and 50 SMEs that had been in operation from 2010 to 2015. The study collected primary data using semi-structured numerically coded questions and used descriptive statistical measure such as mean and standard deviation to analyse data. The results indicated that all demand-side, supply side and infrastructural factors were significantly related to the financial inclusion of SMEs. Evidence that their lack of confidence in the banking sector and prohibitive requirements including high bank charges were some of the key determinants negatively impacting financial inclusion. The smaller operators cited low incomes and the unavailability of savings as another deterrent. Evidence from financial institutions revealed absence of credit history, low-income levels, inadequate infrastructure, weak consumer protection regulations, and limited information on SME operations were inhibiting factors to financial exclusion. Based on the findings, the study recommended that government introduce financial education and introduce a policy that mandates financial institutions to provide relevant products and services to SMEs as an incentive to poverty reduction and economic development. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/25468 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:53:31.817Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2017 |
| publishDateRange | 2017 |
| publishDateSort | 2017 |
| publisher | Research of GSB |
| publisherStr | Research of GSB |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/25468 Determining factors that influence financial inclusion among SMEs: the case of Harare Metropolitan Noor, Hanifa Jere, Mlenga Golden Development Finance Zimbabwe has been experiencing unprecedented levels of unemployment and high poverty. Against this backdrop, the growth of small- to- medium enterprises (SMEs) has been seen as a practical measure to help Zimbabwe's ailing economy address the complex macroeconomic challenges. However SMEs only receive 5% of total loans despite contributing 50% to GDP. This led to high levels of financial exclusion among the owners of SMEs, as banks cite credit risk as major challenge. Empirical evidence highlighted that 60% of the SMEs were financially excluded. This study explored the factors that influence financial inclusion of SMEs in Zimbabwe. This study analysed demand-side, supply-side and infrastructural constraints that inhibit financial inclusion. Demand-side factors of high transaction costs, financial illiteracy, and lack of confidence in the financial system and low levels of education resonated as issues among SMEs. On the supply side and infrastructural challenges: lack of widely accessible branches, information asymmetry, irrelevant financial products and service and high risk levels were the main deterrents within the financial sector. The population for the study was the Zimbabwean banking sector that comprised of 10 financial institutions and 50 SMEs that had been in operation from 2010 to 2015. The study collected primary data using semi-structured numerically coded questions and used descriptive statistical measure such as mean and standard deviation to analyse data. The results indicated that all demand-side, supply side and infrastructural factors were significantly related to the financial inclusion of SMEs. Evidence that their lack of confidence in the banking sector and prohibitive requirements including high bank charges were some of the key determinants negatively impacting financial inclusion. The smaller operators cited low incomes and the unavailability of savings as another deterrent. Evidence from financial institutions revealed absence of credit history, low-income levels, inadequate infrastructure, weak consumer protection regulations, and limited information on SME operations were inhibiting factors to financial exclusion. Based on the findings, the study recommended that government introduce financial education and introduce a policy that mandates financial institutions to provide relevant products and services to SMEs as an incentive to poverty reduction and economic development. 2017-10-02T13:01:53Z 2017-10-02T13:01:53Z 2017 Master Thesis Masters MCom http://hdl.handle.net/11427/25468 eng application/pdf Research of GSB Faculty of Commerce University of Cape Town |
| spellingShingle | Development Finance Noor, Hanifa Determining factors that influence financial inclusion among SMEs: the case of Harare Metropolitan |
| thesis_degree_str | Master's |
| title | Determining factors that influence financial inclusion among SMEs: the case of Harare Metropolitan |
| title_full | Determining factors that influence financial inclusion among SMEs: the case of Harare Metropolitan |
| title_fullStr | Determining factors that influence financial inclusion among SMEs: the case of Harare Metropolitan |
| title_full_unstemmed | Determining factors that influence financial inclusion among SMEs: the case of Harare Metropolitan |
| title_short | Determining factors that influence financial inclusion among SMEs: the case of Harare Metropolitan |
| title_sort | determining factors that influence financial inclusion among smes the case of harare metropolitan |
| topic | Development Finance |
| url | http://hdl.handle.net/11427/25468 |
| work_keys_str_mv | AT noorhanifa determiningfactorsthatinfluencefinancialinclusionamongsmesthecaseofhararemetropolitan |