Effects Of Village Banking Saving Groups On Small And Medium Enterprises In Matero Market, Lusaka

Abstract

This study investigates the effects of Village Banking Saving Groups (VBSGs) on the performance of Small and Medium Enterprises (SMEs) in Matero Market, Lusaka. SMEs are critical to Zambia’s socio-economic development, yet they face persistent barriers in accessing affordable and sustainable financing. Using quantitative methods approach. A structured questionnaire incorporating a five-point Likert scale was administered to a sample of 281 SME operators to assess their experiences across key areas, including access to capital, business growth, financial management, recordkeeping, and business networking. Findings reveal that participation in VBSGs significantly enhances SME access to credit, boosts business resilience during emergencies, and improves members’ financial literacy and managerial confidence. Nonetheless, some challenges persist, particularly in relation to high interest rates and inadequate business skills. The study concludes that village banking models are effective tools for promoting financial inclusion and supporting SME growth in urban informal markets such as Matero. Key recommendations are offered to stakeholders for strengthening the operational and regulatory frameworks of VBSGs to maximize their developmental impact.