Microfinance and SMEs in Chegutu, Zimbabwe: Borrower experiences and perceived livelihood effects in Zimbabwe

Abstract

The study explored the contribution of the microfinance sector in poverty reduction among SMEs in Chegutu. Chegutu, like other urban centres in Zimbabwe, has witnessed increases in poverty, despite the growing presence of MFIs. The study employed an exploratory, qualitative-dominant mixed-methods design to capture borrower experiences and perceived livelihood effects, combining semi-structured questionnaires with KIIs; quantitative summaries are reported descriptively only. CA and HDA underpinned the study. Data collection was through fifty (50) semi-structured questionnaires and five KIIs. The sampling frame comprised 1,889 SMEs in Chegutu. The study targeted SME borrowers listed in MFI registers using systematic sampling. Dividing the population by the intended systematic sample produced every sixth SME (k = 6), yielding fifty-five (55) eligible SMEs; fifty (50) participated after refusals/non-response. Five KIIs were conducted with MFI loan officers from five different MFIs. The study unveiled mixed experiences: some SMEs reported positive livelihood stabilisation effects, whereas others reported limited gains and repayment pressure. Participants and loan officers pointed to the need for a more enabling policy environment for SME viability and responsible microfinance delivery.