Challenges faced by small and medium scale entrepreneurs in accessing credit facilities from Zambia National Commercial Bank (PLC) headquarters in Lusaka.

The study sought to establish the factors influencing access to credit among small and medium enterprises at Zanaco Head office. The aim of the study was to investigate the challenges faced by SMEs in accessing credit facilities from Zambia National Commercial Bank PLC headquarters in Lusaka. A cross sectional study design was employed. Data was collected by the use of questionnaires and interviews. Data analysis included the use of descriptive and inferential statistics. Descriptive statistics involved the use of frequency tables, pie charts, graphs and percentages. ZANACO offers the following as credit facilities; Over Drafts, a long term loan, a bridge loan and a Letter Of Credit. Though the bank offers these credit facilities, it hardly offers a start-up loan and packing credit facility. ZANACO does not offer a wider range or credit facilities because agricultural lending is both risky and expensive. The NPL on agricultural sector currently exceed 37% against 13% across all other sectors of the economy and this is considered to be very high. It is not possible to provide start-up loans and this is compounded by the fact that there is no history of the business or how the farmer will perform if availed a facility. It is also not possible for the bank to guarantee quality. Lack of collateral by some SMEs was also a factor in most instances. This was complicated by a high default risk. Risks could be mitigated by taking collateral, considering applications for SMEs who have invested a sufficient amount of their own capital into the business and by considering only those SMEs who have experience. The key recommendation was that information symmetry should be enhanced between CRBs and financial institutions on one hand and SMEs on the other hand.

Grantor dc:publisher

The University of Zambia

Year dc:date.issued

2022

Author dc:creator

• Daka, Alice

• Influencing access to credit.

Language dc:language.iso

en

Repository record dc:identifier.uri

http://dspace.unza.zm/handle/123456789/7753

OAI identifier oai:identifier

oai:dspace.unza.zm:123456789/7753