An Evaluation of the Implementation of the Small, Micro and Medium Enterprise Policy in Zimbabwe: The Case for Small, Micro and Medium Size Enterprises in Mutare Urban

Abstract

This study sought to evaluate the Micro and Medium Enterprise Policy in the face of entrepreneurial environment challenges being faced by entrepreneurs in Mutare urban. The study was undertaken to establish whether the environmental variables, political, economic and technological variables are affecting the implementation and the achievement of the main goals of the SMMEs policy. In this study 8 Ministry of Small and Medium Enterprise Development officials, 6 City of Mutare representatives, 6 Chamber of Zimbabwe Industries and Zimbabwe National Chamber of Commerce representatives, 40 entrepreneurs and 20 of their clients were used as the research subjects. Questionnaires and interviews were used as research instruments and data was analyzed in a tabular form. The study showed that under political variables, the enactment and operationalization of the Indigenization and Economic Empowerment Act is scaring away investors as the policy creates uncertainty and contradicts the SMMEs policy which seeks to maintain in the business environment a level playing field based on free market principles. Also under economic variables, the study found that stringent conditions and high interest rates attached to borrowed funds are affecting the implementation of the SMMEs policy as most enterprises fail to recapitalize and acquire new technology. The study further showed the need to peg salaries and wages based on productivity. In addition the study has shown that there are subject variables under the main ones which are important but are not affecting the implementation of the policy. Further research is recommended to investigate why it is presumed that private enterprises performs better economically than public entities.