The Impact of Microfinance Institutions Lending on the Small and Medium Enterprises (SMES) in Lusaka Zambia

Author(s)	Dr. Hambula Funwell Sibukoko, Prof. Mubanga Mpundu
Country	Zambia
Abstract	Small and Medium Enterprises (SMEs) are critical to Zambia's economy but face significant credit constraints. This study examines the impact of Microfinance Institution (MFI) lending on SME performance in Lusaka, Zambia. Employing a mixed-methods sequential explanatory design, the study draws on survey data from 250 SME clients of an MFI and qualitative interviews. Multiple regression analysis and thematic analysis were used. The findings reveal that access to credit facilities (β=0.45), frequent deposits (β=0.40), MFI support for stability (β=0.35), and favorable borrowing rates (β=0.28) all have a significant positive impact on SME performance (p<0.01). While MFIs are crucial for providing accessible capital that fosters growth and resilience, high interest rates are found to constrain SME profitability. This research provides needed empirical evidence from the Zambian context, offering implications for both MFI strategy and public policy aimed at fostering SME development.
Keywords	Microfinance, SMEs, Financial Performance, Access to Credit, Financial Inclusion, Zambia
Field	Business Administration
Published In	Volume 7, Issue 6, November-December 2025
Published On	2025-11-13
DOI	https://doi.org/10.36948/ijfmr.2025.v07i06.59938

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