Exploring the Effects of a Public Health Crisis on SMEs in Retail Trade Businesses in Lusaka

Abstract

The study aims to explore the effects of the COVID-19 pandemic on SMEs in retail trade businesses in Lusaka, focusing on Kabwata Market. The general objective is to assess the impact of COVID-19 on SMEs in Kabwata Market. The specific research objectives are to explore the state of growth in SMEs during COVID-19,identify internal factors affecting growth in SMEs due to COVID-19, and identify external factors affecting growth in SMEs due to COVID-19 in Kabwata Market, Lusaka. The study employed a mixed-method approach to assess the impact of COVID-19 on SMEs in the Kabwata market, Lusaka. It targeted 70 respondents, including 60 SMEs and10 government ministry representatives. Data collection involved questionnaires, interviews, and focus group discussions, with thematic analysis for qualitative data and statistical analysis using SPSS for quantitative data.Findings: The study on SME growth in Lusaka, particularly in Kabwata Constituency, reveals significant challenge shindering their development. Only 47% of SMEs are registered, limiting their access to formal financing, while 68%employ few full-time workers, indicating low productivity. Sole proprietorship is prevalent (65%), hindering accessto finance and business growth. Moreover, 60% rely on personal funds, with only 13% accessing formal financial institutions. Internally, factors like lack of security/collateral (60%), equity capital (63%), and management experience (49%) hamper growth, while external challenges such as high taxes (50%), interest rates (42%), and strict bank conditions (50%) exacerbate SMEs' struggles. Recommendations: include formalization, cooperative ownership, enhancing managerial skills, and easing access to finance to foster SME growth amidst these challenges.