Urbanisation and SME growth in a developing economy: Implications for policy

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Abstract

This paper sought to examine the challenges and government support for urban small and medium enterprises (SMEs) in Zimbabwe and offer policy direction for further development of the sector. Previous studies that explored challenges facing the urban SMEs in Zimbabwe paid little attention to government support and policy strategies to develop the sector further (Chigwenya & Mudzengerere, 2013; Thebe & Ncube, 2015). This study intends to fill this gap. Using a qualitative research design, we gathered data from 25 purposively sampled SMEs through in-depth interviews. Data were analysed using content analysis. Results revealed that urban SMEs face several challenges, including access to finance, lack of technical and management skills, and stringent government regulations. Although the government implemented some policies to support SMEs, these measures were inadequate. The government should set aside more resources to support the sector, including SMEs clustering and establishing more business incubation centres to facilitate technology and skills transfer. The government should also strike a balance between the regulatory laws of the sector and its development to achieve sustained growth. More importantly, the government’s urban plans should incorporate the pressing demands of climate change in building inclusive, resilient, and sustainable cities of the future. The study proposed areas for future research.

Keywords: Challenges, Policy, SMEs, Strategy, Urbanisation, Urban Entrepreneurship, Zimbabwe

Authors’ individual contribution: Conceptualization — M.B.; Methodology — M.B.; Formal Analysis — M.B., E.D., and M.M.; Investigation — M.B.; Resources — M.B., E.D., and M.M.; Data Curation — M.B., E.D., and M.M.; Writing — Original Draft — M.B., E.D., and M.M.; Writing — Review & Editing — M.B., E.D., and M.M.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M1, M13, M130

Received: 08.11.2021
Accepted: 11.04.2022
Published online: 13.04.2022

How to cite this paper: Bomani, M., Derera, E., & Mashingaidze, M. (2022). Urbanisation and SME growth in a developing economy: Implications for policy. Corporate Governance and Organizational Behavior Review, 6(2), 123–133. https://doi.org/10.22495/cgobrv6i2p12