Global Journal of Management and Business Research, C: Finance, Volume 22 Issue 4

Benson Philip Hlungupi Samudzimu α & Prof. Dr. Michael Dynamite Benson Munkumba σ Abstract- Small and medium-sized enterprises (SMEs) in Zimbabwe are regarded as the most resilient and the backbone of the economy following years of capital flight since 2000 following the consummation of the fast tract land reform programme. Since then, major corporates disinvested, and this created a huge gap in the products and services supply chain, and the SMEs robustly emerged largely owned by the local people. This paper, however, has established that in as much as the SMEs have a critical role to play, government aided financing infrastructure is characterised by a plethora of policy and regulatory frameworks that limit growth and development of the SMEs to contribute significantly to the development of the economy. Using a review process as a methodology as part of an ongoing doctoral research in this field, the paper puts across that it is vitally important for Zimbabwe to put incentives from a policy and tax rebate point of view, including lessening the bureaucratic red-tape and rigidities that characterise SMEs loan application to access to capital. The various independent and dependent variables in this paper require an overhaul to ensure that the challenges that limit SMEs access to financing are addressed. Keywords: small and medium enterprises, financing, policies & regulatory frameworks . I. I ntroduction he central role of SMEs cannot be doubted as globally, this sector account for the majority of businesses worldwide. Essentially, the SMEs are important contributors to job creation, and above all, there is evidence to the effect that the new frontiers of global economic development, will be driven by the SEMs sector. However, the SMEs have to find its place and become the engines and turbines of growth and transformation of economies. Additionally, SMEs arguably represent about 90% of businesses and more than 50% of employment worldwide – with many African countries’ businesses dominated by SMEs (Asikhia & Naidoo, 2021). In Zimbabwe, this sector has huge potential to change the circumstances of the economy which has been poorly performing since capital flight Author α : Doctoral Student of Business Administration (DBA), Department of Business Management at Swiss School of Management, Switzerland. e-mail: bensonsamudzimu2019@gmail.com Author σ : Supervisor at Swiss School of Management and the Executive Director & Founder of Mihatchi Group, Zambia. from 2000 following the inception of the fast-track land reform and the ensuing external and internal political contradictions. Ideally, the SMEs in the country remain loses as far as their operations are concerned, making it difficult to be funded. Invariably, the SMEs are struggling to formalise. As such, they operate with limited standardisation, when the current funding dictates (variables) demands them to be formal and organised to ensure accountability and tracking of the funded projects. Formal SMEs have greater impact in an economy, and represent about 43% of GDP in Sub- Saharan Africa (Lesser & Moisé-Leeman, 2009). Most of the emerging economies, including Zimbabwe have this competitive advantage and the resilience of the SMEs in the midst of global economic recession, makes SMEs key in sustaining economic growth and development. The GDP contribution could significantly be higher if the SMEs operate formally. The informality characteristics in a wide range of SMEs, demands that the need for formalisation and inclusion of the barest minimum standards of basic business accounting and management. This review established that basic business principles are difficult to adapt among SMEs and in many cases, especially individually run and family management SMEs, such business practices do not exist. This impede attracting potential funding to the SMEs, and this paper examine the dependent and independent variables as they relate to the SMEs funding in Zimbabwe among a plethora of factors. II. M ethodology This paper derives of current literature of an ongoing doctoral study consisting of a study on the role of government aided financing of SMEs in Zimbabwe. As such, the first part of the study deals with mapping out the financing variables from existing SMEs literature contextualised within the Zimbabwean scenario. This mapping has provided insights to understand the complexities of financing SMEs. More importantly, the mapping process provides indicators in as far as existing reports from governments, public agencies, financial institutions regulatory frameworks and policies that are examined in this discussion. Essentially, the methodology in this instance follows a review pathway, which is critical in applied academic review. As lack of T 1 Global Journal of Management and Business Research Volume XXII Issue IV Version I Year 2022 ( ) C © 2022 Global Journals Taxonomy of Small and Medium Enterprises (SMEs) Constraints: An Analytical Perspective of Zimbabwe