Challenges Faced by Start-up Entrepreneurs in Agriculture Sector to Access Finance: A Case of Agro-dealers in Zambia's Central Province

Abstract

<i>Background:</i> This study evaluated financial barriers limiting the growth and sustainability of agro-dealers in Zambia's Central Province. It also examined the impact of these challenges on the agricultural supply chain, assessed the adequacy of existing financial services, and investigated the role of government policies, financial institutions, and development programs in facilitating or hindering access to finance. <i>Methods:</i> Using a cross-sectional design, the study surveyed 384 agro-dealers. Data were collected through structured questionnaires and analyzed using descriptive statistics and logistic regression models to identify predictors of credit access and sales impact. <i>Results:</i> Major financial barriers identified were high interest rates (80.2%), collateral requirements (85.1%), and complex application processes (76.8%). These barriers led to inadequate stock (87.2%), lost sales (82.0%), and reduced product quality (50.8%). Logistic regression showed high interest rates significantly increased credit access (AOR = 6.68) and increased sales impact likelihood (AOR = 5.71). Collateral requirements also increased sales impact likelihood (AOR = 4.07). Thematic analysis highlighted inadequate government support, stringent lending criteria, and limited development program reach. <i>Conclusions:</i> The study highlights the need for targeted interventions, including simplifying application processes, developing tailored financial products, increasing government support, and enhancing development program reach. These measures are crucial for improving agro-dealers' financial stability and growth, thereby strengthening Zambia's agricultural sector and economy.