Synergy between Small to Medium Enterprises and Financial Performance: A Case Study of Bulawayo the Former Industrial Hub of Zimbabwe

Abstract

The synergy between SMEs and Economic performance has for long been acknowledged by governments but not sufficiently researched on how they contribute to economic growth. The decision to conduct this research was prompted by the desire to fill in knowledge gap manifesting among policy makers, entrepreneurs and academics on the extent to which the symbiotic relationship between SMEs financial performance predicate economic performance. Questions such as what is finance for SMEs and what is being used to secure finance by Small Ventures were elucidated. Mixed approach as well as primary source of information was used which was the major highlight on how finance influence venture operation when collecting data. Descriptive statistics were used to determine distribution of economic-performance variables and test for independence of association of variables that were assessed   Results indicated that development and survival of most SMEs hinges on funding. Furthermore, SMEs performance in terms of investment and returns rely heavily on finance. There was an interrelationship on how economic performance stimulates development and productivity of Small Ventures and vice versa. It was recommended that decision   makers and relevant ministries introduce necessary policy that understand, collaborate, and link SMEs and financial performance to promote economic growth. Further the research encouraged the need for a standalone financial policy be designed towards SMEs growth needs and address market imperfections.