AN ANALYSIS OF THE ROOT CAUSES OF SMALL AND MEDIUM SIZED ENTERPRISES (SMES) FAILURE IN ZIMBABWE DURING THE PERIOD 1999-2011.

Goodman Mudzviti, Wilford Mawanza

Abstract


The objective of the research was to identify and evaluate the root causes of Small to Medium Enterprises (SMEs) failure in Zimbabwe during the period 1999-20011 and develop recommendations to ensure that SMEs are sustained into the mainstream economy. The study was conducted through a survey of eighty five (85) SMEs in both Bulawayo and Hwange and the SMEs were scattered across all industries. The constraints shown in order of their descending intensity are; access to finance/capital, management problems, Government regulations, multiple taxes and levies, infrastructure, access to modern technology, non availability of raw materials locally, marketing problems, environmental factors and unfair competition. The importance of SMEs in economic development growth is mainly attributed to their contribution to Gross Domestic Product (GDP), employment creation, and socio economic development. Despite the wide international acceptance and acknowledgement of the key role of SMEs in economic growth, development and sustainability, SMEs continue to face a myriad of challenges, hence there is need for concerted efforts of all and sundry including the Government at all levels, SMEs promoters, agencies, Non Governmental organisations (NGOs), multilateral agencies, banks, financiers and investors to take corrective action and ensure that SMEs are turned into large enterprises of tomorrow.


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