The influence of microfinance institutions programs on women-owned small and medium enterprises (smes) development in mashonaland west province of zimbabwe

Abstract

This present study assessed the influence of microfinance institution programs (products) on women owned Small and Medium Enterprises (SMEs) Development in Mashonaland West Province of Zimbabwe. The research objectives were to establish the types of microfinance financial products that were availed to women owned SMEs, determine the types of microfinance non-financial products that are availed to women owned SMEs, to determine the effects of microfinance products on women owned SMEs development, to establish the moderating effects of government policies on the relationship between microfinance products and women owned SMEs development, to ascertain the types of businesses being pursued by women, to investigate the barriers faced by women owned SMEs when accessing microfinance products. The entrepreneurial process model, Entrepreneurship theory, Resource-Based Theory, the Perking Order Theory, Financial Systems Model and the Women Empowerment Theory informed the study. A pragmatism research philosophy, a mixed research approach, cross sectional survey research design, a self-administered questionnaire and an interview guide were used in this study. The target population of the study were women owned SMEs in Mashonaland west province who accessed microfinance products. The Raosoft sample calculator was used and the population was assumed to be 20 000 as per the recommendations from Raosoft. Three hundred and seventy-seven women owned SMEs in Mashonaland west province constituted the sample size. Data was collected using questionnaires and interview guide and presented in tables and figures. Statistical Package for Social Science version 21 (SPSS), AMOS and NVIVO were used for data analysis. Descriptive statistics such as frequencies, percentages, mean and standard deviation were used for data analysis. To test the research hypothesis, the researcher used structural equation modelling in AMOS. Cronbach’s alpha (α) was used to determine the reliability of the questionnaire and Bartlest test of sphericity and exploratory factors analysis were used to refine the questionnaire. Study findings were that microfinance institutions availed microfinance financial products such as micro loans, micro savings, micro leasing, and hire purchase and consumption loans only. The study results revealed that microfinance institutions were not offering other microfinance financial products such as micro insurance, micro leasing, mortgage, overdrafts and money transfers. In addition, the study revealed that microfinance institutions were only offering networking as a microfinance non-financial product. Microfinance non-financial products such as technical skills, managerial skills, mentoring, business training, marketing assistance, customer care, vii account manager support services, business record keeping, entrepreneurial skills and personal development skills were not availed to women owned SMEs. The study revealed that microfinance products have a positive effect of women owned SMEs development. The study findings revealed that government policies moderate the relationship between microfinance financial products and women owned SMEs development. Further, the study revealed that government policies moderate the relationship between microfinance non-financial products and women owned SMEs development. The study found that women are engaged into various businesses in Mashonaland west province. However, the mainly pursued businesses are agriculture, manufacturing, retailing and wholesaling. Lastly, the study found that women owned SMEs in Mashonaland west province are faced with demand barriers, supply side barriers and regulatory barriers when trying to access microfinance products. Conclusively, microfinance products have a positive influence on women owned SMEs development. The relationship between microfinance financial products and women owned SMEs development is moderated by government policies. Equally, the relationship between microfinance non financial products and women owned SMEs development is moderated by government policies. The study concluded that microfinance institutions offer limited financial products and offer only one non-financial product. Further, the study concludes that microfinance programs positively influences women owned SMEs development, government policies positively moderates the relationship between microfinance programs and women owned SMEs development. The study concluded that women venture into multiple businesses but mainly agriculture, manufacturing, retailing and wholesaling. In addition, the study concludes that demand, supply and regulatory barriers are the barriers faced by women SMEs when they try to access microfinance products.