Financial Skills Impact on the Growth of SMEs in Masvingo, Zimbabwe, Masvingo Province Investigation

Pamire Jongwe, Solly Matshonisa Seeletse and Mmboswobeni Watson Ladzani
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Pamire Jongwe: Department of Business Management, University of South Africa, Pretoria, 0003, Gauteng Province, South Africa
Solly Matshonisa Seeletse: Department of Business Management, University of South Africa, Pretoria, 0003, Gauteng Province, South Africa
Mmboswobeni Watson Ladzani: Department of Business Management, University of South Africa, Pretoria, 0003, Gauteng Province, South Africa

International Journal of Research and Innovation in Applied Science, 2025, vol. 10, issue 1, 01-12

Abstract: This study explores the effect of financial literacy on the growth of small and medium enterprises (SMEs) in Masvingo, Zimbabwe, aiming to enhance understanding of how financial skills impact business performance. It has four main objectives: assessing the financial proficiency of SME staff in budgeting and debt management; examining the relationship between these skills and SME growth; identifying skill gaps that hinder development; and offering actionable recommendations to improve financial literacy. The research addresses a significant gap in existing literature regarding financial literacy’s role in SME success in Zimbabwe, providing insights for policymakers, financial institutions, and business development organizations. This study adopts a positivist paradigm, emphasizing objective, empirical data collection through quantitative methods to investigate the impact of financial skills on the growth of SMEs in Masvingo. Utilizing a descriptive survey design, data were collected from 233 SME owners and employees via self-administered questionnaires, with analysis focused on correlations between financial skills and business growth outcomes. The results show a divide in perceptions regarding financial skills’ impact on growth: 48% recognize a positive influence while 51% perceive little to no effect. This discrepancy suggests varying opinions on financial literacy’s significance or indicates that other factors such as access to capital or market conditions may play a more prominent role in determining business growth. Enhancing financial literacy could improve decision-making and contribute to long-term success. There is a general recognition of the importance of financial skills in driving SME growth, significant areas for improvement exist across budgeting practices, debt management, investment decisions, and tax strategies. Addressing these gaps through enhanced financial literacy and training could foster better decision-making and support sustainable business development.

Date: 2025
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