Assessing the Factors Affecting Small and Medium Enterprises in Contributing to Trade Expansion in Zambia: A Case Study of SMEs in Lusaka

This study assessed how financial constraints, market networking, and trade regulations affect the contribution of Small and Medium Enterprises (SMEs) to trade expansion in Lusaka District, Zambia. A mixed-methods descriptive cross-sectional design was used. Quantitative data were obtained from 100 SME owners and managers, while qualitative evidence came from 10 key informants. Descriptive statistics, chi-square tests, correlation, and regression analysis were used for the quantitative data, and interview responses were analysed thematically. Financial constraints had a strong negative relationship with the widest market served (r = -0.872) and remained a significant negative predictor in the combined model (b = -1.1569, p < 0.001). Market networking was positively related to trade expansion (r = 0.780) and remained a significant positive predictor after controlling for the other factors (b = 0.4039, p < 0.001). Trade regulations showed a positive bivariate association with market reach (r = 0.543), but their independent effect was not statistically significant in the combined model (b = 0.1215, p = 0.389). The combined model explained 80.5% of the variation in market reach (R² = 0.805, adjusted R² = 0.799, F(3,96) = 132.03, p < 0.001). Interview evidence showed that working capital, buyer linkages, certification, and licensing conditions are closely connected. The study concludes that affordable growth finance and stronger market networks are central to SME trade expansion, while regulatory reform should reduce compliance frictions that limit access to finance and formal buyers.