Factors Affecting Effective Participation of Small and Medium Enterprises in Public Procurement

Globally, public procurement has been used as a tool to support small and medium size enterprises (SMEs) due to the important role they play in the economy. SMEs participation in every sphere of economic activities including public procurement is one of the ways the sector can promote economic development of the country. However, SMEs sometimes are usually reluctant to sell to government. The purpose of the study is to investigate the factors affecting effective participation of SMEs in public procurement market in Zambia. This study employed cross sectional descriptive design, with a quantitative approach. Data was collected was collected from a total of 186 respondents drawn from SMEs registered with PACRA and operating in Lusaka, the capital city of Zambia. Random sampling was used in selecting SMEs, and respondents included company/business owners, managers as well as supervisors. Data collected was analysed using exploratory factor analysis and regression analysis. The findings revealed that regulatory framework factors, SMEs capacities factors, public procurement tendering factors and SMEs attitude factors are significant determinants with a combined effect size of (0.675) and a coefficient of determination of 43.9%. Further, based on the Hierarchical regression model, the study finds that the largest predictors of SMEs effective participation in public procurement market are public tendering process and SMEs attitude towards public procurement. Findings of this research can potentially contribute to high participation of SMEs in the public procurement market in Zambia.