Effects of microfinance services on the livelihoods of marketeers in Zambia: A case of Matero market in Lusaka

Abstract

Over the years, marketers in Zambia have increasingly turned to microfinance institutions (MFIs) to access financial assistance for the purpose of driving socio-economic development and alleviating poverty within their households. Recognizing the pivotal role of small and medium enterprises (SMEs) and microfinance services in fostering economic growth, the Government of Zambia has proactively established an enabling environment through various policy initiatives. Key among these are the inclusion of provisions for financial inclusion in national policy documents, such as the lapsed Seventh National Development Plan (2017–2021), the National Financial Inclusion Strategy (2017–2022), and the creation of the Ministry of Small Medium Enterprises (MSMEs) to oversee the comprehensive development of SMEs. The primary objective is to empower under-serviced economic agents such as marketers, enabling them to spur business growth and augment their income. In this article, we delve into the impact of microfinance services on the livelihoods of marketers in Zambia. To accomplish this, the study employed a robust quantitative research design, utilizing a research instrument comprising closed-ended questions. The data collected through questionnaires was subjected to meticulous analysis using descriptive statistics and regression analysis, employing the Excel package. The findings of the study revealed that several determinants influence marketers’ participation in MFIs. These determinants include gender, the level of knowledge and understanding, marital status, the type of business, and the duration of business operation. Furthermore, the study reveals that marketers who engage with MFIs experience significantly improved livelihoods compared to those who do not. Access to MFI services plays a pivotal role in enhancing the overall well-being of marketers. Based on the study’s insights, it is strongly recommended that MFIs continue to extend their support and management of loans by providing comprehensive education on loan utilization. Such educational initiatives, offered by MFI officers, should be implemented after clients receive their loan disbursements. By empowering marketers with knowledge and guidance on optimizing loan utilization, MFIs can significantly contribute to the sustained growth and success of marketers’ businesses while simultaneously improving their livelihoods.