Analysis of financial barriers to indigenous enterprise formation on the Copperbelt Province

Thèse de Master , 2014 , 171 Pages , Note: Pass

Gestion d'entreprise - Divers

The Micro, Small and Medium Sized Enterprises (MSMEs) are the backbone engine for the economic development of any nation. They contribute to the reduction of poverty through creation employment. They actively contribute to the Gross Domestic Product (GDP) and similarly to the Gross National Product (GNP). The MSMEs of today are the large multinational corporations of tomorrow. These are the corporations which will inevitably outlive their founders for generations to come. In order for them to fulfil the above effectively, they require financial support.
Therefore, there is need to establish schemes which will narrow the financial barriers that suffocate indigenous enterprise formation. This is the focus of this document.
For purposes of data collection leading to the answering of the research questions, this study used cluster sampling in which it divided its target population of 200 into four clusters namely: A (Commercial Banks); B (Non-Bank Institutions); C (Government Agencies); and D (Indigenous SMEs)
MSMEs on the Copperbelt Province in the Republic of Zambia have continued to express dissatisfaction about lack or inadequate of financial support from government and financial lending institutions as much as funding of entrepreneurial activities is concern. It is for this reason that this study aimed at establishing the financial barriers that impede SMEs from accessing funds for enterprise formation and the make recommendations on how these barriers could be bridged.
The results obtained demonstrated that MSMEs failed to get financial assistance due to among other financial barriers; the lack of information on financing options; the failure of MSMEs to formalise their businesses; lack of proper financial statements demanded for by the lending institutions; lack of appropriate and adequate collateral; the high cost of borrowing; the intensity of documentation when attempting to access finance; finacial indiscipline and poor credit history; and the negative image that lenders have about entrepreneurs. These are barriers to access of finance by entrepreneurs that are desirous of either starting up enterprises or growing their already existing ones.
Central to the successful access of finance by SMEs was financial literacy and availability of information on the services and products that financials institutions and government agencies such as CEEC offer. [...]

Inhaltsverzeichnis (Table of Contents)

• CHAPTER ONE: BACKGROUND TO THE STUDY
• 1.0 Introduction
• 1.1 Background to Financing SMEs in Zambia
• 1.2 Problem Statement
• 1.3 Research Questions
• 1.4 Research Objectives
• 1.5 Significance of the Research
• 1.6 Scope of the Research
• 1.7 Organisation of the Thesis
• 1.8 Summary
• CHAPTER TWO: LITERATURE REVIEW
• 2.1 Introduction
• 2.2 Definition of Terms and Classification of Indigenous Enterprises
• 2.1.1 Micro Enterprises
• 2.1.2 Small Size Business Enterprises
• 2.1.3 Medium Size Business Enterprises
• 2.1.4 Informal Enterprises
• 2.3 Overview of the role of SMEs in Social & Economic Development
• 2.3.1 Employment Creation
• 2.3.2 Gross Domestic Product
• 2.3.3 Contribution to Gross Capital Formation (Physical Assets)
• 2.2.4 Other Roles Played by SMEs
• 2.4 Financing SMEs
• 2.5 Types and sources of Financing
• 2.5.1 Debt Financing
• 2.5.2 Equity Financing
• 2.5.3 Grants
• 2.5.4 Microfinance
• 2.5.5 Venture Capital
• 2.5.6 Angel Investors
• 2.5.7 Crowdfunding
• 2.6 Challenges Faced by SMEs in Accessing Finance
• 2.6.1 Lack of Collateral
• 2.6.2 High Interest Rates
• 2.6.3 Lack of Financial Literacy
• 2.6.4 Bureaucracy and Red Tape
• 2.6.5 Lack of Access to Information
• 2.6.6 Corruption
• 2.7 Government Policies and Initiatives to Support SMEs
• 2.7.1 The Zambia Development Agency (ZDA)
• 2.7.2 The Small and Medium Enterprise Development Agency (SMEDA)
• 2.7.3 The Citizens Economic Empowerment Commission (CEEC)
• 2.7.4 The Industrial Development Corporation (IDC)
• 2.7.5 The Ministry of Small and Medium Enterprise Development (MSMED)
• 2.8 Summary
• CHAPTER THREE: RESEARCH METHODOLOGY
• 3.1 Introduction
• 3.2 Research Design
• 3.3 Population and Sampling
• 3.4 Data Collection Methods
• 3.4.1 Questionnaires
• 3.4.2 Interviews
• 3.4.3 Documentary Review
• 3.5 Data Analysis
• 3.6 Ethical Considerations
• 3.7 Summary
• CHAPTER FOUR: DATA ANALYSIS AND FINDINGS
• 4.1 Introduction
• 4.2 Demographic Characteristics of Respondents
• 4.3 Financial Barriers to Indigenous Enterprise Formation
• 4.3.1 Lack of Collateral
• 4.3.2 High Interest Rates
• 4.3.3 Lack of Financial Literacy
• 4.3.4 Bureaucracy and Red Tape
• 4.3.5 Lack of Access to Information
• 4.3.6 Corruption
• 4.4 Government Policies and Initiatives to Support SMEs
• 4.4.1 The Zambia Development Agency (ZDA)
• 4.4.2 The Small and Medium Enterprise Development Agency (SMEDA)
• 4.4.3 The Citizens Economic Empowerment Commission (CEEC)
• 4.4.4 The Industrial Development Corporation (IDC)
• 4.4.5 The Ministry of Small and Medium Enterprise Development (MSMED)
• 4.5 Summary
• CHAPTER FIVE: DISCUSSION OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
• 5.1 Introduction
• 5.2 Discussion of Findings
• 5.3 Conclusions
• 5.4 Recommendations
• 5.5 Summary
• REFERENCES
• APPENDICES

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This dissertation aims to analyze the financial barriers to indigenous enterprise formation on the Copperbelt Province of Zambia. It seeks to identify the specific challenges faced by indigenous entrepreneurs in accessing finance and to evaluate the effectiveness of government policies and initiatives designed to support SMEs. The research utilizes a mixed-methods approach, combining quantitative and qualitative data collection techniques to provide a comprehensive understanding of the issue.

• Financial Barriers to Indigenous Enterprise Formation
• The Role of Government Policies and Initiatives
• The Impact of Financial Barriers on SME Growth and Development
• Recommendations for Addressing Financial Barriers and Fostering Indigenous Enterprise Development
• The Importance of Financial Literacy and Access to Information for Indigenous Entrepreneurs

Zusammenfassung der Kapitel (Chapter Summaries)

Chapter One: Background to the Study

This chapter provides an overview of the study's context, outlining the importance of SMEs in Zambia's economic development. It highlights the challenges faced by indigenous entrepreneurs in accessing finance, particularly on the Copperbelt Province. The chapter also defines the research problem, research questions, objectives, significance, scope, and organization of the thesis.

Chapter Two: Literature Review

This chapter delves into the theoretical framework of the study, reviewing existing literature on SME financing, indigenous enterprise development, and the role of government policies in supporting SMEs. It examines various types and sources of financing, including debt financing, equity financing, grants, microfinance, venture capital, angel investors, and crowdfunding. The chapter also explores the challenges faced by SMEs in accessing finance, such as lack of collateral, high interest rates, lack of financial literacy, bureaucracy, and corruption. It further analyzes government policies and initiatives aimed at supporting SMEs in Zambia, including the Zambia Development Agency (ZDA), the Small and Medium Enterprise Development Agency (SMEDA), the Citizens Economic Empowerment Commission (CEEC), the Industrial Development Corporation (IDC), and the Ministry of Small and Medium Enterprise Development (MSMED).

Chapter Three: Research Methodology

This chapter outlines the research methodology employed in the study, including the research design, population and sampling techniques, data collection methods (questionnaires, interviews, and documentary review), data analysis methods, and ethical considerations. It provides a detailed explanation of the research process and the rationale behind the chosen methods.

Chapter Four: Data Analysis and Findings

This chapter presents the findings of the study, analyzing the collected data to identify the specific financial barriers faced by indigenous entrepreneurs on the Copperbelt Province. It examines the demographic characteristics of respondents, explores the prevalence of financial barriers such as lack of collateral, high interest rates, lack of financial literacy, bureaucracy, and corruption, and evaluates the effectiveness of government policies and initiatives in supporting SMEs.

Schlüsselwörter (Keywords)

The keywords and focus themes of the text include indigenous enterprise formation, financial barriers, SME financing, Copperbelt Province, Zambia, government policies, SME development, access to finance, financial literacy, and economic development.

• Cours: Entrepreneurship
• Note: Pass
• Auteur: BA, MBA Gift Harris Nachibanga (Auteur)
• Année de publication: 2014
• Pages: 171
• N° de catalogue: V284089
• ISBN (ebook): 9783656836117
• ISBN (Livre): 9783656836124
• Langue: anglais
• mots-clé: analysis, copperbelt, province