Challenges Facing Small and Medium Enterprise (SMEs) in Accessing Public Equity in Zambia

Access to public equity has been one of the biggest challenges for small-and medium-sized enterprises (SMEs). in Zambia. To address this challenge, the Lusaka Securities Exchange launched the Lusaka Securities Exchange (LuSE) Alternative Market (Alt-M) whose aim is to create a more enabling platform for SMEs and other emerging companies to participate on the capital markets and thereby raise capital for growing their businesses. Despite this initiative, the Alt-M has not achieved any listing since its inception. The objective of this research study is to investigate obstacles that SMEs face in raising long-term finance through LuSE Alt-M. The study focuses on the analysis of secondary data. The researchers reviewed multiple data sources that included books, reports and publications, journal articles, and online databases. The research findings identify a number of challenges encountered by SMEs in Zambia. The challenges that featured prominently include availability of information, corporate governance issues regulatory requirements, and transaction costs. Accessing public equity by SMEs continue to be a challenge to growing the SME sector in Zambia. A number of policy recommendations made by the research paper include market education targeting both SMEs and investors, tax incentives, reducing disclosure requirement, and private placement of issue issues in order to reduce transaction costs. Keywords: Sock exchange; Small and medium-sized-enterprises (SMEs), public equity; Lusaka Securities Exchange (LuSE); Alternative Investment Markets DOI: 10.7176/EJBM/17-3-10 Publication date: April 30th 2025