Performance of MSMES in Zambia: an investigation of critical success factors.

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Kunda, Guylet
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The University of Zambia
Micro, Small, and Medium-sized Enterprises (MSMEs) are a very heterogeneous group and operate in a wide array of business activities. MSMEs play a critical role in the development of an economy as they are a source of livelihood and employment creation. In Zambia, MSMEs development is one way of reducing reliance on the mining sector and building a more diverse and resilient economy. The study aimed to establish the critical success factors of micro, small and medium enterprises in Lusaka that can be emulated by similar enterprises to ensure business survival success. The study was limited to identifying and understanding critical success factors that affect the performance of MSMEs in the Lusaka district. The study focused on identifying Critical Success Factors (CSF) relevant in the Zambian environment. To achieve the research objectives of investigating the critical success factors in the performance of MSMEs in Zambia, a survey methodology was adopted. The study employed both qualitative and quantitative methods of collecting and analysing data. The study identified 10 critical success factors for MSMEs in Zambia within the wider spectrum of Entrepreneurial factors, Enterprise factors, and Business environment factors. The 10 CSF revealed by the study are 1. commitment of the owner/manager; 2. business planning; 3. management of competitors; 4. government regulations; 5. management of customers; 6. enterprise's pool of resources; 7. management of sources of finance; 8. employee commitment; 9. Innovation; and 10. Profitability. The study, therefore, concludes that MSMEs need to pay particular attention to the identified 10 (ten) CSF for the sole purpose of achieving the desired performance. It should be recognized that critical success factors for MSMEs vary from region to region, country to country, and according to the type of MSMEs. The success and performance of MSMEs largely depend on how they can cope with these critical success factors identified and how policymakers and implementing agencies understand these realities. The study recommends that there is a need for the government to scale up its efforts towards the protection of the MSMEs for them to be able to thrive. Further, the study recommends that MSMEs develop a strategy through which they can obtain customer feedback on their products/services and use these responses to develop superior tastes for their products. Besides, the study recommends that MSME's should set-up financial priorities at the commencement stage of their business.
Thesis of Master of Business Administration