Developing sustained tools for managing financial constraints among women and youth-led agro-based SMEs

By Mary Lubungu, Stephen Kabwe, Mitelo Subakanya and Muzumbwe Chinganya

Access to credit remains critical to Small and Medium Enterprise’s (SMEs) growth and private sector employment creation. Accessing finances promotes the business’s establishment and development, covers day-to-day expenses, and is critical in recruiting additional staff. Ultimately, the growth of SMEs benefits the economy in general by accelerating economic growth and intensifying competition. However, access to credit, let alone commercial cash loans, remains low, especially among female SMEs. SMEs’ major challenges in accessing credit include unfavourable financial repayment terms such as high-interest rates and lack of sufficient collateral, low financial literacy, inappropriately designed financial products, and a weak formal financial service providers’ appreciation of needs. In addition, some women-led SMEs perceive that banks do not give their businesses equal opportunities compared to male-led SMEs (FSDZambia, 2017). Therefore, SMEs need integrated support in addressing these constraints for them to flourish and grow.

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