Global Journal of Business, Management and Accounting

Global Journal of Business,Management and Accounting Vol. 2(1) pp.041-055, February  2012                                                                           

Available online Available online http://www.globalresearchjournals.org/?a=journal&id=gjbma

Copyright ©2012 Global Research Journals.

Review.

Sources of finance for Micro and Small Enterprises (MSEs) since the use of Multi-currency system in Zimbabwe.

Mabhungu Isaac, Masamha Blessing, Mapfaire Loveness, Jaravaza Divaris, Maseko Nelson, Chirimubwe Gilbert, Chari Felix

Bindura University of Science Education, P.Bag 1020, Bindura, Zimbabwe

Corresponding Author: Mabhungu Isaac. Email:imabhungu@buse.ac.zw

Phone: +263 773 912 912

Accepted 26^th February 2012

Abstract

The study sought to explore the sources of finance used by Micro and Small Enterprises in Zimbabwe from the period when the country began using the Multi-currency system at the beginning of 2009 up to end of 2011. The sample consisted of 120 MSEs in Harare, 70 MSEs in Kadoma and 40 MSEs in Bindura and convenience sampling was used to select members of the sample. A structured questionnaire was sent to the respondents. The main source of start-up finance used was either business owners’ savings or internal sources of funds from the company and this depended on the size of the company, nature of business and ownership structure. Very few MSEs had access to bank loans and these were mainly in the Hotel and Catering and Manufacturing sectors. Trade credit finance was the main source of external finance and this was irrespective of the MSE’s nature of business, size or form of business ownership. There was not much financial support from the Government and NGOs. It is recommended that MSEs should use alternative means to finance their businesses such as sharing resources, delaying payment, reducing accounts receivables.

Key Words: Finance; MSE; Multi-currency; Business sector; Business Ownership.