Investigating the Levels of SMEs' Participation in International Trade in Zambia: A Case Study of SMEs in Lusaka's Kamwala Trading Center

Small and Medium Enterprises (SMEs) are a crucial component of Zambia's economy, representing approximately 90% of all businesses and providing livelihoods for about 80% of the workforce. Despite their significance, SMEs in Lusaka's Kamwala Trading Center remain underrepresented in international trade, highlighting a need to understand the factors influencing their participation and the challenges they face. The purpose of this study was to examine the levels of Zambia’s SMEs' participation in international trade. A mixed-methods approach was employed, with 50 SMEs in Kamwala Trading Center, and data analysis was performed using Megastat. The results show that product quality and standards (50%) and understanding buyer preferences (58%) are key factors influencing international trade participation. The chi-square test results indicate that there is no significant association between the type of business and the main factor influencing the ability to engage in international trade (χ² = 12.05, p = 0.7404), indicating that factors influencing international trade engagement are similar across different types of businesses, including retail, wholesale, manufacturing, services, and others. However, 76% of SMEs are unaware of support programs. The study further reveals that high transportation costs (42%), currency exchange rate risks (38%), and delays at borders/customs (20%) are major challenges faced by SMEs when engaging in international trade. The ANOVA test reveals that there is no significant relationship between the independent variables (type of business and years of operation) and the dependent variable (biggest challenge faced by SMEs in international trade), with an F-value of 0.48 and a p-value of 0.6247, indicating that the model is not a good fit for the data, suggesting that other factors not included in the model may be more important in determining the biggest challenge faced by SMEs in international trade. The study concludes that SMEs face significant challenges in international trade, but opportunities exist through digital methods (social media, 52%) affordable finance (42%) and partnerships with foreign buyers/distributors (38%). The study recommends implementing capacity building, improving access to finance, enhancing digital literacy, encouraging partnerships, and increasing awareness of support programs.