Original Research

Financial literacy among small and medium enterprises in Zimbabwe

Margaret Mashizha, Mabutho Sibanda, Blessing Maumbe
The Southern African Journal of Entrepreneurship and Small Business Management | Vol 11, No 1 | a241 | DOI: https://doi.org/10.4102/sajesbm.v11i1.241 | © 2019 Margaret Mashizha, Mabutho Sibanda, Blessing Maumbe | This work is licensed under CC Attribution 4.0
Submitted: 11 January 2019 | Published: 12 November 2019

About the author(s)

Margaret Mashizha, Graduate School of Business and Leadership, University of KwaZulu-Natal, Durban, South Africa
Mabutho Sibanda, School of Economics and Accounting, University of KwaZulu-Natal, Westville Campus, Durban, South Africa
Blessing Maumbe, Faculty of Commerce, Bindura University of Science Education, Bindura, Zimbabwe


Background: Global concerns about financial literacy have heightened following the 2007–2008 global financial crisis during which it became apparent that lack of financial literacy was one of the factors that contributed to detrimental financial decision making. This recognition shows that poor financial decisions have a harmful overspill impact on financial and economic stability in a country. Complex financial markets call for exceptional levels of financial competence to enable individuals and business people to make intelligent choices among competing financial products. The study was conducted in two provinces of Zimbabwe, namely, Harare and Mashonaland Central Province among small and medium enterprises (SMEs) who were in operation.

Aim: The study sought to ascertain the level of financial literacy among SMEs business owners and to identify factors that influence the financial literacy levels. The research will give an insight on the state of preparedness of SMEs to participate in highly complicated financial markets. This adds to the existing scarce literature in sub-Saharan Africa on financial literacy levels among SMEs.

Setting: The study was conducted among SMEs who reside in two provinces of Zimbabwe namely Harare Province and Mashonaland Central province.

Methods: A quantitative cross-sectional research design was employed, with data collected by means of a questionnaire administered to a sample of 384 SMEs in Harare and Bindura districts.

Results: Findings revealed lower levels of financial literacy among SMEs. The main variables influencing financial literacy levels were interest rates and inflation.

Conclusion: The study concludes that financial literacy among SMEs is low, and hence there is a need to introduce financial literacy education among small business owners. It is recommended that measurement of financial literacy be extended to different population cohorts to provide baseline data on which policies can be crafted.


Financial literacy; small and medium enterprises; interest rates; inflation; Zimbabwe.


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