Assessing Small and Medium Enterprises’ (SMEs’) Growth Challenges and Opportunities: A Case Study of Chipata District
1Alice Biniwa Mvula, 2Chrine C. Hapompwe
1,2Graduate School of Business, University of Zambia 10101 Great East Road Campus, Lusaka, Zambia.
https://doi.org/10.47191/jefms/v8-i4-18ABSTRACT:
The study focused on assessing the growth challenges and opportunities of small and medium-sized enterprises (SMEs) in Chipata District, Zambia. The specific objectives were to examine the nature of challenges and opportunities faced by SMEs, investigate the factors leading to the failure of start-ups within five years, and develop a practical framework to guide SMEs in Chipata District. The study employed a mixed-methods approach, integrating qualitative and quantitative research approaches. The descriptive survey design was adopted, targeting a finite population of 85 SMEs, SME employees, and industry experts. Using Yamane’s formula with a 5% margin of error, a sample size of 70 respondents was derived. A sample of 70 participants was selected, comprising 60 SME employees chosen through random sampling and 10 experts, including local authority officials and SME owners, selected via purposive sampling. Data were collected through structured questionnaires and interview guides. Quantitative data were analyzed using the Statistical Package for Service Solutions (SPSS) to produce descriptive statistics, while qualitative data were subjected to content analysis to extract key themes. The findings revealed that SMEs face numerous challenges, including a highly competitive environment, financial constraints, outdated technology, insufficient government support, and lack of strategic knowledge. Opportunities were identified in leveraging government programs and local market demand. Start-up failures were attributed to inadequate capital, limited managerial competencies, and difficulties in retaining skilled employees. To address these issues, a framework was proposed, focusing on harmonizing regulatory frameworks, improving access to financing, building managerial and technological skills, and establishing innovation hubs to enhance product development and competitiveness. The study concludes that SMEs’ success depends on fostering managerial skills, embracing innovation, ensuring access to capital and infrastructure, and developing a committed workforce. Sustainable SME operations require enabling regulatory policies, strategic market linkages, and capacity-building initiatives. Recommendations included streamlining regulations, enhancing access to government programs, fostering mentorship initiatives, and creating innovation hubs. Policymakers are advised to prioritize a conducive regulatory environment, improve financing mechanisms, and invest in capacity-building initiatives for SMEs to thrive.
KEYWORDS:
Challenges, Opportunities, SMEs’, Growth, Chipata, Zambia.
REFERENCES:
1) Adamu, A. A., Wan, C. Y., & Gorondutse, A. H. (2019). Determinants of Sustainable Performance of SMEs: A Proposed Framework. International Journal of Research and Scientific Innovation (IJRSI) | Volume VI, Issue VI, ISSN 2321–2705, 182-188.
2) Alise, M. A., & Teddlie, C. (2010). A continuation of the paradigm wars? Prevalence rates of methodological approaches across the social/behavioural sciences. Journal of Mixed Methods Research, 4(2), 103-126.
3) Aminu, I. M., & Shariff, M. N. (2015). Determinants of SMEs Performance in Nigeria: A Pilot Study. Mediterranean Journal of Social Sciences Vol. 6, No 1, 156-164.
4) Bamberger, M & Cheema S. (1990) Case Studies of Project Sustainability: Implications for Policy and Operations from Asian experience. The World Bank, Washington, D.C.
5) Bank of Zambia. (2023). 2022 Micro Small and Medium Enterprise Finance Survey Report. Lusaka: Bank of Zambia.
6) Cicea, C., Popa, I., Marinescu, C., & Ștefan, S. C. (2019). Determinants of SMEs’ performance: evidence from European Countries. Economic Research-Ekonomska Istraživanja 32:1,DOI: 10.1080/1331677X.2019.1636699, 1602-1620.
7) Collis, J., & Hussey, R. (2003). Business research: A practical guide for undergraduates and postgraduates’ students (2nd Ed.). New York: Palgrave Macmillan Publications.
8) Creswell, J. W., & Creswell, J. D. (2018). Research design (5th ed.). SAGE Publications.
9) Development Southern Africa, 16(2), 291-297. Creswell, J. W., & Plano, C. V. L. (2011). Designing and conducting mixed methods research. Los Angeles, CA: Sage Dardane, N. (2010).
10) Denscombe, M. (2014). The Good Research Guide: For Small-Scale Social Research Projects. Buckingham, England: Open University Press
11) Dyson, K. (1990). Small and medium sized enterprises. .London: Routledge and the University of Bradford and Spicers Centre for Europe.
12) Elsmani, M. O., Rahim, A. A., & Mohammed, A. M. (2017). A Reviiew of the E -commerce Barriers Faced by SMEs in Africa. International Journal of Innovation and Business Strategy (IJIBS)/ Vol. 7, No. 1, 54-65.
13) Greene, J. C. (2006). Toward a methodology of mixed methods social inquiry. Research in the Schools, 13(1), 93-98.
14) Guba, E. G., & Lincoln, Y. S. (1994). Competing paradigms in qualitative research. In N. K. Denzin & Y. S. Lincoln (Eds.), Handbook of qualitative research (pp. 105-117). London, England: Sage.
15) Harding, Sandra. 1987a. “Introduction: Is There a Feminist Method?” Pp. 1–14 in Feminism and Methodology, edited by S. Harding. Bloomington: Indiana University Press.
16) Harini, S., Pranitasari, D., Said, M., & Endri, E. (2023). Determinants of SME performance: Evidence from Indonesia. Problems and Perspectives in Management, 21(1), doi:10.21511/ppm.21(1), 471-481.
17) Hesse-Biber, S. N. (2010). Mixed methods research: Merging theory with practice. New York, NY: Guilford Press.
18) Hussein, M. E., & José, C. (2023). A Review of Industry 4.0 Maturity Models: Adoption of SMEs in The Manufacturing and Logistics Sectors. Procedia Computer Science 219, 236-243.
19) ITC. (2020). Promoting SME Competitiveness in Zambia. Geneva: international Trade Centre.
20) Kotane, I. (2022). Determinants, Measurement And Management Of Performance In Small And Med2ium-Sized Enterprises. Journal of Regional Economic and Social Development 14, 54-70.
21) Lincoln, Y. S., & Guba, E. G. (2011). Paradigmatic controversies, contradictions, and emerging confluences, revisited. In N. K. Denzin & Y. S. Lincoln (Eds.), Handbook of qualitative research (4th ed., pp. 97-128). Thousand Oaks, CA: Sage.
22) Long, H. C. (2013). The relationship among learning orientation, market orientation, entrepreneurial orientation, and firm performance of Vietnam marketing communications firms. Philippine Management Review, 20, 37–46.
23) Lusaka Times. (2022, November 9). SMEs contribute 70% to GDP-Mubanga. Lusaka, Lusaka, Zambia.
24) Ministry of Small And Medium Enterprise Development. (2023). Revised National Micro Small And Medium Enterprise Development Policy. Lusaka: MSMED.
25) Moorthy, M. K., Tan, A., Choo, C., Wei, C. S., Ping, J. T., & Leong, T. K. (2012). A study on factors affecting the performance of SMEs in Malaysia. International Journal of Academic Research in Business and Social Sciences, 2(4), 224-239.
26) Nuwagaba, A. (2015). Enterprises (SMEs) in Zambia. International Journal of Economics, Finance and Management, 146-153.
27) Nweze, A. (2009). Concept of Small and Medium Enterprise (SME), The Nation, [online] Available at:
28) Olaitan, M. (2006). Finance for small and medium enterprises: Nigeria’s Agricultural credit guarantee scheme fund. Journal of International Farm Management, 3 (2), 2-9.
29) Organization for Economic Co-operation and Development (OECD). (1997). Globalization and small and medium enterprises (SMEs). London: OECD Publications.
30) PMRC. (2023). Eastern Province: General Information. Lusaka: PMRC.
31) Raosoft Inc. (2004). Raosoft Inc. Retrieved from Sample size calculator: http://www.raosoft.com/samplesize.html?nosurvey
32) Sapsford, R., &Jupp, V. (2006). Data collection and analysis (2nd Ed.). London: SAGE Publication
33) Sekaran, U., & Bougie, R. (2016). Research Methods For Business: A Skill Building Approach. (7th ed.). West Sussex: Wiley.
34) Smit, Y., & Watkins, A. J. (2012). A literature review of small and medium enterprises (SME) risk management practices in South Africa. African Journal of Business Management, 6(21), 6324–6330.
35) World Bank. (2013). The little data book on private sector development. Washington: World Bank.
36) Zambia Statistics Agency & Ministry of Labour and Social Security). (2023). 2022 Labour Force Survey Report. Lusaka: Zambia Statistics Agency and Ministry of Labour and Social Security.
37) Zambia Statistics Agency. (2023). 2022 Labour Force Survey Report. LUSAKA: Zambia Statistics Agency and Ministry of Labour and Social Security.
38) Zambia Statistics Agency. (2023). Highlights of the 2022 Poverty Assessment in Zambia. Lusaka: Zambia Statistics Agency.
