An assessment of survival strategic of small and medium scale enterprises during the recent recession in Botswana : finance perspective (the case of Gaborone and its environs)

Abstract

This study examines the impact of recession on Small and Medium Scale Enterprises' (SMEs') performance, and survival strategies during recession in Botswana (Gaborone and its environs). Data was collected through questionnaires and personal interviews to 60 randomly selected SMEs. Data was analyzed using SPSS software. The study revealed that SMEs in terms of profit were generally affected negatively during the peak period of recession in Botswana in (2009). Availability of credit was generally a big challenge during recession. Furthermore, SMEs came out with strategies to counter the recession. The study concludes by presenting some (policy) recommendations. The study followed the qualitative method of research. The objectives of the study were to examine the performance of SMEs in terms of profit during recession; to find out the recession impact on SMEs by location, gender and type of business during recession; to establish the liquidity and survival strategies being put in place by SMEs in response to banks and other financial institutions position during recession; and to make recommendations basing on findings. The major findings of this study are that most males were affected by cash flow problem 64.7%, and only 35.3% women cited cash flow as an area of great impact on their businesses during recession. This affected profits negatively. The study revealed that 8.3% of those who cited a problem of banks not offering support to women, were women. The following are recommendations pertaining to the study. Policymakers should at least give room for credit advances to some businesses during recession. Local Enterprise Authority (LEA) should offer training to SMEs so that they see the need to share business strategies than to refrain from information sharing. Women should be given priority when advancing credit to SMEs as the study revealed that they are at a disadvantage. SMEs are encouraged to adopt some recommendations by fellow SMEs on how to survive during recession.