A study of the factors preventing SMEs participation in alternative stock market in Zambia.
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Date
2020
Authors
Lungu, George
Journal Title
Journal ISSN
Volume Title
Publisher
The University of Zambia
Abstract
The lack of SME financing has prompted the need to provide an alternative way to raise funds from the sale of shares through the Alternative Security Markets (ASM). Thus SMEs need to be allowed to register on the stock exchange market. This paper was inspired by the lack of research on this trend in Zambia as it tried to examine factors that could encourage SMEs to register on the ASM. To achieve this goal, the research adopted a quantitative method, while the research strategy used a survey. The study adopted a descriptive research design. The design was considered appropriate in determining factors that prevents SMEs businesses from raising finance on the ASM. The study used a Stratified sampling technique where random sampled quotas were chosen. The size of the sample was determined using Yamen’s formula that derived 65 companies. Questionnaires were used to obtain primary data in this study. Data were obtained from a sample size of sixty five (65) respondents drawn from the population of 4,058 SMEs. Four factors were considered that prevents SMEs from listing on ASM and these are 1) (information accessibility), factor 2) (regulatory requirements), factor 3) (corporate governance) and factor 4) (Transaction cost). Research findings indicated that information access, regulatory requirements, corporate governance, and transaction cost for SMEs are critical in deciding SMEs participation on the ASM. The study concluded that information accessibility, regulatory requirements, corporate governance, as well as transaction cost are important in determining SMEs listing on the ASM. The research findings confirm the previous studies carried out in Kenya, South Africa, Nigeria and London that availability of information, regulatory requirements, corporate governance, and cost of the transaction were key factors in the listing of SMEs. The study
recommended that if Lusaka stock exchange is to establish an effective ASM for SMEs they should factor in information accessibility, regulatory requirements, corporate governance, and transaction cost. Keywords: SMEs, alternative, stock, market.
Description
Thesis of Master’s Degree in Accounting and Finance.