A Study on the Viability of Savings and Credit Cooperatives, As a Tool for Raising Capital and Poverty Alleviation in Rural Communities a Case Study of Nkayi SMEs

The study assessed the viability of Savings and credit cooperatives as a tool for raising capital and poverty alleviation in rural communities .A case study of Nkayi SMEs The SME sector plays a pivotal role in Zimbabwe, as SMEs are the backbone of the economy. They provide employment and alleviate poverty among households. Despite their immense economic contribution to the economy, the SME sector faces a plethora of challenges. The problems include lack of access to funding as most of the SMEs do not have collateral, which is required by the financial institutions, and they also face poverty as a result of poor rainfall. The study targeted 60 participants who are rural entrepreneurs in the leather and furniture manufacturing cluster of the economy. Participants that were chosen met the inclusion criteria. Data to be used in the research was gathered by structured questionnaires which were self administered with the help of assistants which are trained. Descriptive and Inferential statistics were generated using the Statistical Package for Social Sciences (SPSS) version 23. Regression Analysis was used to analyse data collected from the research. The study concluded that there is a positive effect between the viability of SACCOs as a tool for raising capital and poverty alleviation among SMEs in Nkayi . The study came up with the crucial link between the effect of SACCOs and raising capital for rural SMEs .The study represents the opinions of a sample carried out in Nkayi , the importance of choosing the study area was to explore the viability of SACCOs in the particular study area. Future studies can focus on the role of SACCOs in the growth of the SME sector . This will help the government to come up with policies that govern Savings and credit Cooperatives . The study proposed that in order for SACCOs to be viable, there should be one governing body that governs SACCOs , availing of support to SACCOs by the government To avert the challenge of funding faced by the SME sector there should be the formalization of Savings and Credit Cooperatives. To the outcomes of the current study have vital implications for both SME practitioners, government, Nkayi rural district and academics. The study revealed that the challenges experienced by SMEs directly contribute to their slow growth in Bulawayo.
Originality/Value- The study contributes to researchers and practitioners as it proffers approaches that promotes the growth of the SME and poverty alleviation through the vaiable implementation of SACCOs, there is little research on the viability of SACCOs in providing capital for SMEs and poverty alleviation.

SACCOs, SMEs

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