Investigating the Factors Influencing the Growth of Small and Medium Enterprises (SMEs) in Zambia: A Case of Lusaka City Market

Abstract

This study explored factors influencing SME growth in Lusaka City Market in Zambia, focusing on access to finance, entrepreneurial skills, and government policy. SMEs are vital to Zambia's economy but face growth constraints. Using a mixed-methods approach, data were collected from 94 SME using simple random sampling owners/managers via questionnaires and purposive sampling was used on 15 key informants through interviews. SPSS analysis showed access to finance had the strongest positive impact on growth (r = 0.642, β = 0.489, p < 0.01), followed by entrepreneurial skills (r = 0.511, p < 0.01) and government policy (r = 0.468, p < 0.01). Many respondents lacked formal business training, and key barriers included limited financial literacy, high interest rates, and weak policy implementation. The study concluded that improving finance access, entrepreneurial capacity, and policy support is critical for SME growth. Recommendations include inclusive lending, practical training, and regulatory reforms—offering valuable guidance for policymakers and stakeholders.