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DETERMINANTS OF SMALL AND MEDIUM ENTERPRISES FAILURE IN ZIMBABWE: A CASE STUDY OF BINDURA

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Author(s): Mudavanhu Victoria | Bindu Samuel | Chigusiwa Lloyd | Muchabaiwa Lazarus

Journal: International Journal of Economics and Research
ISSN 2229-6158

Volume: 02;
Issue: 05;
Start page: 82;
Date: 2011;
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Keywords: Small and Medium Enterprises | Informal Sectors | Economic growth

ABSTRACT
The study seeks to establish the major causes of Small and Medium Enterprises (SMEs) failure in Zimbabwe. Basing on a case study for Bindura, Ordinary Least Squares (OLS) estimation criteria was employed to estimate the change in return on investment function which was used as proxy for SME failure. Data were gathered through formal and informal interviews, questionnaires and focus group discussions with SMEs which were randomly selected from different clusters representing different industries. Results showed that lack of general knowledge on business management, unavailability of credit, import competition and high cost of raw materials are the major causes of SME failure in Zimbabwe.
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