Effectiveness of Business Rescue Procedures in Zambia: A Case of the Development Bank of Zambia

Abstract

The study sought to evaluate the effectiveness of business rescue procedures in Zambia with reference to the viewpoints at Development Bank of Zambia using a mixed method design and obtaining questionnaire responses from a sample of twenty five (25) respondents and analysed the findings using the statistical package for social sciences which was used to draw charts for easy interpretations. The objective of the research was to evaluate the practical application of business rescue in Zambia using the case organisation. The study revealed and concludes that the available business rescue procedures that exist in Zambia are effective and includes restructuring, selling and/or integrating the company into another viable entity and strategies that positively address the concern of the various stakeholders. Further, business rescue is a better option that is effective than straight liquidation and the effectiveness of business rescue procedures is to the extent that it guarantees the interests of the various stakeholders who include the employees, shareholders, creditors and other capital providers owing to the fact that when the entity continues in operation for the foreseeable future, more returns and/or profitability will be generated through the alteration of the operational strategy to address the gaps that are currently affecting the entity to result in it being a financially distressed and thus making it difficult to be managed properly. This is opposed to straight liquidation which natively impacts the various stakeholders in terms of job security prospects and desirable returns in comparison to the capital provided to the company especially that the entity exists as a separate legal entity from the owners in which only the company can sue and be sued in its own right which is significantly not a better option.