Assessing the uptake of digital financial service (DFS) by micro, small and medium-sized enterprises (MSMEs) in cross border trading in Zambia.
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Date
2024
Authors
Imwiko, Nawina
Journal Title
Journal ISSN
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Publisher
The University of Zambia
Abstract
The purpose of the study was to investigate the uptake levels of Digital Financial Service (DFS) and its enhancement on operations of Micro, Small and Medium-sized Enterprises (MSMEs) in Zambia. The study’s presentation, analysis, and conclusion were based on three hundred (300) respondents which included two hundred and ninety one (291) registered MSMEs found in Lusaka that carry out cross-border trading, 1 (one) response from Financial Regulator (Bank of Zambia), six (6) responses from registered Commercial Banks and two (02) responses from Mobile Network Operators (Airtel and MTN Zambia) in Zambia. The data was analysed both qualitatively and quantitatively. The study revealed that 71.3% MSMEs interviewed acknowledged that Digital Financial Service (DFS) is important and facilitates effectiveness in conducting business and those that had access to DFS have had a good experience with the digital platforms. However, only 35% of the interviewed MSMEs were utilizing DFS in conducting their business across borders. Majority of the MSMEs are lagging in adopting digital financial services (DFS) due to lack of awareness of the innovative lending options and digital financial platforms that may enhance the operations of their businesses and improve their business performances. The study further revealed that there are barriers/challenges that limit the MSMEs in utilizing digital financial Services (DFS). These include, lack of knowledge of the many advancements that have been in the Digital Financial Service (DFS) sector, high transaction costs, deliberate government policy targeting
MSMEs in cross border trading and security concerns, Despite the sensitization that the Service providers of DFS are advancing, the channels of communication being used on product information which is mostly institution website is not accessed by the MSMSEs in cross border trading. The study recommends enhanced information dissemination to cross border traders by DFS would enhance the uptake of DFS by MSMEs. The study also revealed that most of the service providers do not have targeted policies for MSMEs, as most of their policies are blanket type that cover a wide base of clients despite their different needs. This observation was also extended to the DFS regulator (Bank of Zambia) which lacked targeted policies on MSMEs. Deliberate capacity building in digital skills and digital entrepreneurship for MSMEs to be done by DFS providers and other relevant stakeholders. In conclusion, the study revealed the there is low uptake of DFS by MSMEs resulting in inefficiencies in the operation(s) of MSMEs in cross boarder trading.
Description
Thesis of Master of Science in Operations, Project and Supply Chain Management.