Business Financing Options for SMEs in Zimbabwe Post February 2009

Abstract

During the decade starting from 2000, Zimbabwe has experienced a severe economic meltdown culminating in hyperinflation. Most business operations ground to a halt due to lack of agricultural and industrial production. To kick start the economy, the Zimbabwean government adopted a multi-currency system in February 2009 among other several measures. This policy position wiped away all savings which were Zimbabwean dollar denominated and this meant that all entrepreneurs were starting businesses or continuing in business from a zero capital base. To compound issues there were limited or no external financial sources. SMEs are considered to be the bedrock upon which Zimbabwe’s economic revival will be built. The objective of this study is to explore how Zimbabwean SMEs financed their operations post the adoption of the multi-currency system in 2009 or gained access to financial resources. An interesting finding of this study was that resources especially financial resources were very limited due to the economic conditions prevailing in the country. Organisations had to balance the need for resources against availability and had to depend on internal resources rather than external resources. As a result several business issues have had to be parked until the business’s financial position improves.