Investigating Factors Limiting Access to Finances for Micro, Small and Medium-Sized Enterprises (MSMEs). A Case Study of Chibombo District in Zambia

Micro-Small-Medium- Enterprises (MSMEs) in Zambia contribute significantly to the socio-economy of the country, contributing to over 70 percent of Gross Domestic Product (GDP), 88 percent of employment, and 97 percent of business. According to the Bank of Zambia, three out of five business fail within months of operation and other remain stagnant for a long period of time without any significant growth. One of the causes of failure of MSMEs has be attribute to lack of finance. Several reports have indicated lack of access to finance such as credit facilities from lending institutions has led to most of the failures. The study aimed at establishing the reasons for lack of access to credit facilities with objectives of understanding accessibility to credit facility for MSMEs in Chibombo district, specific reasons for failure to access credit facilities by MSMEs in Chibombo district and also establishing solutions to failure to accessibility of loans in Chibombo district. The study involved a mixed method approach, Qualitative and Quantitative approach, with a sample size of 30 respondents from major MSMEs categories across Chibombo district, who were interviewed in line with research objectives. A thematic approach was used to analyze qualitative and percentages of respondents who had access to credit facilities was computed for qualitative data. The results indicated that 20 percent (6/30) of the sampled MSMEs had access to finance through loan from a Microfinance. A significantly low percentage. The results also indicated collateral requirements, high interest rates, lack of aware and politicization of government schemes as barriers to credit facilities accessibility.