Funding models for gold productivity from artisanal and small-scale gold mines in Zimbabwe

Abstract

The main objective of this research was to determine the best funding model(s) that would help Artisanal and Small-Scale Gold Mines achieve optimal gold productivity. The study noted that there was poor funding from RBZ and financial institutions which is affecting gold productivity. The study used the mixed approach guided by pragmatism philosophical thinking which included both quantitative and qualitative data collection techniques to have a balanced analysis. The survey design was employed and data was collected using questionnaires and an interview guide. For this study, three hundred and six (306) participants were selected using the random sampling method to answer the questionnaire using the Krejcie and Morgan Model (1970). The researcher also carried out interviews up to saturation point and thirty-one (31) mine owners were conducted. The participants who have taken part in the interviews were not selected to answer questionnaires. The study used exploration sequential mixed method research design to collect the data. The major findings of the study are: ASSGM used internal and external funding models. For ASSGM in Zimbabwe to achieve optimum gold production the following internal and external funding mechanisms should be employed: internal (personal savings and owner capital), external (private funding, tribute system, joint ventures cooperatives and partnerships). The study also noted that there was very weak association between government and other agencies support and gold productivity and the weak association was insufficient. The low use of funding from banks was mainly due to lack of collateral, lack of formalisation, non-availability of nearby banks, lack of paperwork required by banks and that other miners never visited banks looking for funding. The only financial players who were available to Artisanal and Small-Scale Gold Miners were microfinances and most ASSGM in Zimbabwe shunned them due to high interest rates. The major causes of ASSGM sector not to access funding from Ministry of Mines Industrial Loan Fund (MILF), Reserve Bank of Zimbabwe (RBZ) and Fidelity Printers and Refineries (FPL) was due to requirements that every miner had to meet. The study concluded that artisanal and small-scale gold miners needed both financial and non-financial assistance from the government. On non-financial assistance that the miners needed were: Geological Survey Reports, Tittle Deeds, Hire Purchase shops which could sell mining equipment at subsidized prices and there was need to decentralise Fidelity selling points (mobile shops) in areas that artisanal and small-scale gold mining normally took place. The following policies could be implemented to the ASSGM sector: consistency in the payments for ASSGM, payment of miners using same price with international buyers, improvement of ASSGM asset quality (collateral) by offering them hire purchase shops, education of ASSGGM on knowledge of finance and the need for RBZ/FPR and MILF to review their funding requirements since some miners were failing to meet the requirements. On theoretical implications, the study further strengthened funding theories already existing which shows that small firms should be funded by least cost funding theories as was shown that most miners were using personal savings. On academic vii implications the study helped to widen funding theory as information on funding models to artisanal and small-scale mines is still scanty. To advance theory of funding models for small scale firms, there was need to do the same research in the agriculture sector (small scale farmers) who were accessing different funding mechanisms from the government.