Assessment of Micro – Financial Institutions and Effects on SME Growth: A Case study of Chama District

This research examines how microfinance institutions (MFIs) contribute to the growth of small and medium-sized enterprises (SMEs) in Zambia's Chama District. It analyzes multiple factors such as legal frameworks, financial obstacles, technological impacts and support systems currently in place. A mixed-methods approach was used, combining quantitative and qualitative data collection techniques.

Quantitative data was gathered through structured surveys, which identified statistical relationships between MFIs and the success of SMEs. Qualitative insights, obtained from interviews with key stakeholders—including MFI staff, SME owners, and regulators—shed light on the financial difficulties faced by SMEs. The research employs a framework that integrates positivism and interpretivism, facilitating both empirical analysis and a deeper understanding of the contextual elements affecting SMEs. In addition, a stratified random sampling method paired with primarily descriptive techniques was utilized to ensure a diverse representation of different SME types. The results show that while microfinance institutions (MFIs) are crucial for providing financial services, they encounter significant challenges, including strict regulatory requirements and limited access to technology. The research highlights the urgent need for tailored support initiatives that improve financial access for small and medium-sized enterprises (SMEs) and encourage technology usage.

These insights significantly impact policymakers, financial institutions and development organizations. Establishing a supportive regulatory framework and implementing targeted initiatives to enhance the SME sector in the Chama District is essential. This research enhances our comprehension of the complex relationship between microfinance and SME growth, providing meaningful guidance for future microfinance and economic development strategies.