Modelling Individual Determinants of Small and Medium Enterprises’ Growth - Failure in Lusaka Central And Mwembeshi Business Areas

Abstract

The aim of this research was to study the growth – failure of SMEs in Lusaka central and Mwembeshi Business Areas, particularly looking at their growth-failure rate, their sustainability, and the bottlenecks to their growth. The research was conducted with 3 specific objectives; to establish the rate of growth-failure among SMEs in Lusaka Central and Mwembeshi Business Areas; to establish the sustainability of SMEs in Lusaka Central and Mwembeshi Business Areas; to determine bottlenecks to the growth of SMEs in Lusaka Central and Mwembeshi Business Areas. A cross-sectional study design and the purposive sampling method were used on a population of 2,906,000 in Lusaka with about 102,000 active SMEs. A sample size of 196 was selected using the stratified random sampling technique. The primary data was collected from all the targeted 196 respondents, using structured questionnaires with both open and closed-ended questions. The research established that 70.4% of SMEs in the Lusaka Central and Mwembeshi Business Areas were either failing or static in their business operations. To which the study recommended that the government and co-operating partners create an environment where SMEs thrived. It was also established that only 29.6% of the respondents were found to have managed to sustain their businesses since they started. The study also recommended for the creation of an environment that allows SMEs to grow, because growth is evidence of sustainability. Bottlenecks to SMEs growth were also identified with the main one being a lack of entrepreneurial training. The study recommended for the introduction of entrepreneurial training in schools, with the hope that this will help SMEs to be sustainable and lower the high failure rate of SMEs in Zambia.