An Establishment of Barriers Affecting Micro Small and Medium Enterprises Utilisation of Lusaka Securities Exchange Alternative Market in Lusaka City

Abstract

This study examined barriers that affected MSMEs utilisation of LuSE Alt-M in Lusaka city, Zambia. The primary objectives of the study were to assess the level of awareness among MSMEs about the existence of LuSE Alt-M in Lusaka city, to examine why MSMEs are not utilising the LuSE Alt-M in Lusaka city and to suggest strategies that may mitigate the non-utilisation of LuSE’s Alt-M in Lusaka city. The study was guided by the pragmatic philosophy so as to provide practical solutions to the barriers affecting MSMEs utilisation of LuSE Alt-M. A cross-sectional, convergent mixed-method approach was employed. A response rate of 74% was achieved, with 290 completed questionnaires. The quantitative sample size, determined using Yamane’s formula at a 95% confidence level and a 5% margin of error, comprised of 391 MSMEs drawn from a population of 17,643 MSMEs registered with the Zambia Revenue Authority, with turnovers between K800,000 and K50,000,000, based in Lusaka, the country’s commercial hub. Qualitative data saturation was reached after 12 interviews with key informants. Stratified random sampling was employed for quantitative data collection while purposive sampling was used for qualitative data.  Quantitative data from survey questionnaires were analyzed using SPSS version 27, while qualitative data obtained from interviews with capital market specialists were analyzed thematically, enabling triangulation of findings. The findings revealed that 63.4% of MSMEs in Lusaka were either strongly unaware or unaware of LuSE Alt-M’s existence, and 71.4% lacked knowledge of its benefits. The study further revealed that awareness (r = .677, p<.05), listing and compliance costs (r = .-540, p<.05), and stringent listing requirement (r = .-704, p<.05),  were key barriers to MSMEs utilisation of LuSE Alt-M. Based on these findings, the study recommends collaborative efforts between LuSE, Zambia Chamber of Commerce and Industry (ZACCI), and business associations to enhance MSME awareness, alongside targeted education campaigns. Additionally, Lusaka Securities Exchange (LuSE) and Securities Exchange (SEC) should consider reducing listing costs and revising regulatory requirements to improve accessibility, while the Ministry of Finance and National Planning (MoFNP) should introduce more tax incentives to encourage participation. Establishing incubation programs to provide mentorship and market support could further enhance MSME utilisation of LuSE Alt-M. These findings offer critical insights for stakeholders, emphasizing the need for policy interventions to improve MSME access to capital markets, ultimately fostering economic growth and resilience in Zambia.