Effectiveness of the Lusaka Stock Exchange Alternative-Market in Capital Finance for SME's in Zambia

Chisanga Chisanga, Muchemwa Sinkala, George Mtayachalo, Fredrick Musweu


This research carried out an assessment of the effectiveness of the Lusaka Stock Exchange (LUSE) Alternative-Market in Capital Finance for SME's. The research was designed under a broadly realist paradigm. In this study, a deductive approach was used. The research was quantitative in nature incorporating a descriptive design. The research targeted 53 SMEs that were oriented by DBZ with regards to listing on the Alt-M and all of them were incorporated in the study. A structured questionnaire was used as a data collection tool. To analyse primary data, SPSS version 25 was used. The results indicate that SME capital finance is positively significantly correlated (all sig. ≤ 0.01) with each direct mechanism of financing (r = 0.666) and indirect mechanism of financing (r = 0.613).  The study concluded that as its Alt-M was not effective but has the potential of meeting its objectives provided it manages to have SMEs listed. The positive association recorded with the study variables gives an indication that despite the challenges that are associated with the alternative market, it has the capacity of being effective in capital financing for SMEs. It was recommended that LuSE should engage with key stakeholders to revise the listing rules to encourage a number of SMEs to be listed, this will allow the alternative market to serve its purpose. Also, LuSE should increase awareness and understanding to SMEs about alternative financing opportunities through the alternative market. This could be done by making available material on the importance of listing, inviting potential SMEs to workshops and induction programs on listing

Keywords: Alternative Market (Alt-M), Capital Financing

DOI: 10.7176/RJFA/13-24-03

Publication date: December 31st 2022

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ISSN (Paper)2222-1697 ISSN (Online)2222-2847

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