Micro, small medium enterprise (MSMEs) and financial inclusion in Zambia

Master Thesis


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This study investigated Zambia's current financial inclusion state with specific reference to micro, small and medium enterprises (MSMEs). It also sought to determine the relationship between the age of the owner of MSME, size, literacy, gender, age, the period of operations, asymmetrical information, and financial inclusion in Zambia. The data collected from 70 respondents comprising MSMEs owners were analysed using multiple regression, correlation analysis and descriptive statistics. The research employed dependent variables, notably access, availability, and financial services, as the dependent variable. In contrast, independent variables included the size of MSME, literacy level, income level of the owner of MSME, the period of operations and asymmetrical information. On the one hand, the empirical findings indicate a positive relationship between usage and availability of financial services, and 'MSME's age of owner, size, literacy, gender, age, operation period, asymmetrical information in Zambia. On the other hand, findings, however, also show a negative relationship between gender and financial inclusion access. Whilst a positive relationship with the remaining independent variables. Accordingly, the study concluded that financial inclusion is evident in Zambia among MSMEs. However, the primary issue is that most MSMEs do not have access to formal funding from formal financial institutions. Therefore, the study calls for policies to be put in place to help MSMEs have access to formal financing. In addition, it also proposes formalising 'women's informal sector, financial literacy roadshows for women in the informal sector, training women in digital skills to enable them to have better access to financial services and giving financial institutions targets to onboard women-led MSMEs.