The Contribution of Financial Management Practices to the Growth of SMEs in Bulawayo CBD: A Case Study of Bulawayo Centre, Imbali Mall and Haddon & Sly Complex.

Abstract

Financial management practices are ways of handling a company’s finances in a bid to help it be successful and compliant with regulations. This study focused on the contribution of financial management practices to the growth of Small and Medium Enterprises (SMEs) in Bulawayo Central Business District (CBD), particularly those operating at Bulawayo Centre, Imbali Mall and Haddon & Sly Mall. Lately, sentiments have been suggesting that SMEs in Zimbabwe are failing due to a variety of reasons, and they generally need help in adopting and applying financial management practices effectively. The literature revealed the need for extensive research on how frequently these financial management techniques are employed and how they correlate with the expansion of SMEs. The study employed a mixed research method and utilized a survey conducted through questionnaires and interviews. The findings of the study revealed that SMEs are employing financial management practices effectively, however, a few are not keen to carry out financial reporting and audits as well as implement budgetary control systems. This study recommended that SMEs should develop a financial management plan that includes budgeting, cash flow management and financial reporting, and seek advice from professional financial advisors to ensure compliance with the best practices. It is also important for future researchers to explore the role of technology in improving financial management practices and the growth of SMEs and consider longitudinal studies to track changes in financial management practices over a long period of time and how they impact the growth of SMEs. This study concluded that it is beneficial to adopt professional financial management practice systems and use all methods of financial management as it contributes to growth. It is also important to note that the growth of SMEs is impacted by other factors, apart from financial management practices, which include competition and macro-environmental challenges.