Is there hope for small businesses in Zambia?

Hope? To start with, it takes courage to start a small business in Zambia. The odds are against you from the word go. You lack business management and entrepreneurship skills, the cost of business is primitively prohibitive, and most dreaded, access to affordable financing is none existent; the cost of finance is so high its hard to imagine success. But the small business still sets off.

So the question, “Is there hope for people who are already going against the odds?” is an oxymoron. In a sense, small businesses in Zambia have mastered the skill of turning their challenges into opportunity. Their hardships are their stepping-stones.

Like Dr. Martin Luther King Jr. said of the civil movement in America, “hewn a stone of hope out of a mountain of despair.”

“The small business owner is the embodiment of hope.” My claim.

The tax laws in Zambia are draconian, designed as though to ensure that the small business is aborted. The tax a small business will pay on a used car in Zambia is enough to buy a brand new car in the United States. The cost of transport and the cost of communication are perched to delink small businesses from the very systems that should prescribe them the very light of day. Because of tax and transport cost, various items in Zambia, for instance, are 300% more expensive than in neighboring Tanzania. But small businesses never give up hope.

You see they may not hope in the chance of a better business environment, but they hope in their own power to overcome the challenges that face them. They may not hope in their government’s policies to favor their cause because it does not. But they hope in their skills and in their competencies. They are motivated by their own pain and needs. Instead of fearing failure, they believe in success regardless.

But I wonder what it could be like, how much prosperity we could create, if government became genuinely proactive in ensuring that the roadblocks to entrepreneurial success are terminated once and for all. I fancy the marketplace in Zambia where the financial systems are developed well enough to close the loopholes of loan defaults and hence affording to give corporate credit at manageable rates and conditions.

But even if all of my day dreaming ends up less than a thought in the world of silence, the small business in Zambia still has no choice but to succeed. That is why I have dedicated my life to work with SMEs. It is not because they need me to give them hope. It is because they give me hope that someday they will usher in economic emancipation when the floodgates of small business development reach the level where they will no longer be ignored.

Of course there is hope for small businesses in Zambia.

ACCESS FINANCE FOR YOUR SMALL BUSINESS IN ZAMBIA

In my work of motivating and coaching SMEs in Zambia, I am always saddened as I reflect on the challenges that we face in the marketplace. Three main challenges dog SMEs:
1. The lack of business management and entrepreneurship skills
2. The high cost of doing business
3. The lack of access to affordable finance

To start with management skills among the SMEs is generally poor especially in terms of human resource management, financial and accounts management, and sale and marketing management. Most SMEs lack quality skills to ensure that they put up, manage, and maximise the potential of a great team. They are also unable to professionally keep financial records, let alone manage their money effectively. Most disheartening most SMEs have not harnessed technology and globalisation to take advantage and market themselves and their products.

The cost of doing business in Zambia is ridiculously heinous. Our tax regime hurts the small businesses who enjoy no tax relief particularly in imports as most of them are in trade and manufacturing. The cost of real estate, transportation, and other primary business necessities continue to render many small business morbid before they even have the chance to bud.

But worse of all is the cost of finance. Not only is financing extremely expensive, but even access to financing is practically untenable for small businesses. Most banks are not SME friendly and this is a serious challenge for most entrepreneurs. This provides a lot of business for Shylocks who exploit people by charging an exorbitant 50% interest in a maximum period of 30 days, strategically designed for the debtor to default so that the collateral is seized and sold for a higher price.

Such are the challenges that SMEs face on the marketplace particularly here in Zambia. But with the backdrop of the economic and social role that entrepreneurs play in society it important that we ourselves become smart enough to develop solutions for this problem.

That is why we have come up with a financial management system that will enable SMEs to access funds to help them grow their business without the need for collateral. The system will be trust based and will ensure that SMEs develop financial systems in their businesses that will be sustainable in the long term.

For more information contact Brian Matambo on 0979360027 or email me on brianmatambo@gmail.com and I will invite you to attend a 2 hour workshop in Lusaka, on how you can access financing for your small business without collateral and in turn build a sustainable financial system for your business and grow your enterprise.