Small And Medium Enterprises Business Sustainability Challenges And Rejoinders: A Case Of Selected Districts In Zambia

The study objective was the examination of business sustainability challenges facing Small and Medium Enterprises (SMEs) in selected districts in Zambia. The study assessed whether the challenges lead to lack of operational and financial sustainability, and thereby, develop a broadbased theory in the form of a holistic framework for managing SME sustainability in Zambia.  

To achieve the objective, the study adopted a mixed method approach using both qualitative and quantitative methods; primary data was collected using a Survey Questionnaire and Focus Group Discussions. The population for this study was the Mazabuka District Business Association, Kafue District Business Association and Lusaka Central Business District. The total population targeted was 120: out of which a sample 69 was drawn. This study used Convenience sampling which is a non-probability sampling method. Quantitative data was analysed using Statistical Package for the Social Sciences (SPSS) version 22 and descriptive statistics used quantitatively to describe the information using frequencies, percentages, tables and graphs. The Qualitative data from the Focus Group discussions was analysed using content/thematic analysis. Major findings of the study established that although there is adequate legal and policy framework for the promotion of the SME sector in Zambia, SMEs face serious challenges. Challenges  such as lack of capital as the most single biggest obstacle to business, which  is ‘access to funds ‘as 30.4%, of the respondents confirmed, while, 43.5% of the respondents said they were ‘struggling but surviving’, due to lack of entrepreneurial competencies, lack of financial record keeping, and too many competitors, and high transport charges to reach markets. 

The study also established that dysfunctional District Business Associations and a weak and fragmented coordination between government agencies responsible for the implementation of the legal and policy frameworks and measures meant to develop the SMEs, have created a business environment where SMEs are not sustainable. The study therefore recommends that Government should consider establishing an SME Bank as was done in Malaysia where a bank was established by the government exclusively to support the SME sector. This deliberate policy would ensure that SMEs would easily access loans or funding for them to remain competitive as the cost of money can be regulated in support of the SME sector operators. In view of this, Government should review its SME policies to accommodate business sustainability strategies and continue to create a stable macroeconomic environment. Macroeconomic stability is desirable because it is characterised by low inflation, stable and investment friendly interest and exchange rates. It aids planning and enables businesses to make reasonable forecast on costs, turnover and returns on investment. Further research can be done in “Value Networks and Partnerships” as a way of addressing the challenges faced by SMEs in Zambia. This is a practical framework for SMEs sustainability as it may provide unity and solidarity among SMEs for them to collaborate more and therefore become sustainable.