The Evaluation of the High Banking Sector Profits and Weak Manufacturing Start-up Entrepreneurs in Zimbabwe

This study investigates the paradoxical relationship between high profitability in the banking sector and the persistent financial vulnerability of manufacturing start-up entrepreneurs in Zimbabwe. While the financial sector has remained profitable in the post-hyperinflation period, manufacturing start-ups continue to face structural barriers to accessing affordable and timely finance. This imbalance has constrained industrial growth, innovation, and employment creation, undermining broader economic recovery efforts. Grounded in financial intermediation and institutional theory, the study examines how banking practices, risk perceptions, and credit allocation mechanisms shape entrepreneurial outcomes in the manufacturing sector. A mixed-methods research design was employed, integrating quantitative surveys administered to banking professionals and manufacturing entrepreneurs with qualitative interviews and focus group discussions. Quantitative data were analysed using descriptive and inferential statistical techniques, while qualitative data were thematically analysed to triangulate and contextualise findings. Reliability and validity were strengthened through methodological triangulation and instrument testing. Findings reveal that banks prioritise low-risk, high-return financial activities, including treasury instruments and foreign exchange trading, while imposing stringent collateral requirements and high interest rates on start-up entrepreneurs. Entrepreneurs reported limited access to tailored financial products, lengthy loan processing times, and weak advisory support. These practices reflect a risk-averse banking culture that constrains innovation and weakens the manufacturing start-up ecosystem. The study further identifies policy and institutional gaps, including fragmented support mechanisms and limited coordination between banks and development finance institutions. The study concludes that Zimbabwe’s profitable banking sector has not effectively fulfilled its developmental intermediation role in supporting manufacturing entrepreneurship. Policy reforms, targeted credit guarantee schemes, and customised start-up financing instruments are recommended to better align banking incentives with industrial development objectives. Strengthening access to finance for manufacturing start-ups is critical for revitalising Zimbabwe’s productive sector and fostering sustainable economic growth.