The Bank of Zambia – BOZ Micro Small, and Medium Enterprises (MSME) Finance Survey report of 2022, has revealed that 97 percent of the Micro, Small, and Medium Enterprises (MSME) which are mostly local enterprises were unable to source for start-up capital from commercial banks and other lending institutions.
The reasons behind this huge failure rate for local enterprises to access capital from banks was due to high-interest rates, limited tailored products and lack of collateral among many other challenges.
According to the MSME finance survey report conducted and released by the Bank of Zambia, Only 3 percent of enterprises were able to source for start-up capital from commercial banks, microfinance institutions, the government, NGOs, and community-based financial institutions such as saving groups leaving out the 97 percent with no option but to source for start-up capital from families and friends.
Small and Medium Enterprises (MSMEs) whose are mostly locally owned businesses are the lifeblood of economies around the world as they drive economic growth, create more jobs, and foster innovation. However, the numerous challenges they face hinder them from growing and providing the much-needed support to the growth of the economy.
The main barriers to accessing credit were high-interest rates, lack of collateral, and low income levels. This has resulted in a situation where many entrepreneurs are unable to start or grow their businesses, leading to a stagnant economy and high unemployment rates. Details to follow…..
