The Impact of Institutional Factors on the SMEs desire to List on the Securities Exchange
Journal Title: Scholars Journal of Economics, Business and Management - Year 2017, Vol 4, Issue 9
Abstract
Abstract:Small and Medium Enterprises (SMEs) are the main source of economic growth in developing countries and contribute largely to employment creation (Kilonzo, 2011). One of the prerequisites for successful operation of SMEs is access to finance. The Lusaka Securities Exchange (LuSE) was developed in Zambia to enable companies raise relatively cheaper long term capital. In 2014, the stock market in Zambia came up with a market known as the LuSE Alternative Market. It was established to create a more enabling platform for small and medium enterprises. However, despite the formation of the Louis Alternative market, small and medium enterprises still prefer to obtain loans and external financing from banks to fund their businesses as compared to sourcing these finances from the capital market which in actual sense is more affordable than the banks. Since the launch of the LuSE Alternative Market in 2014, no SME has been listed. This paper therefore sought to assess the effect of access to information, the desire to maintain control, regulation and corporate governance have on the desire to list on the LuSE Alternative Market. This study adopted a descriptive survey and multiple regression was used tonanalyse the data. The findings of this study revealed that of the four Factors that were assessed, access to information and following regulations have a positive significant effect on the desire to list. Desire to maintain full control has a significant negative effect on the desire to list. While corporate governance has no significant effect on the desire to list, although the result could not be conclusive because most of the respondents were not sure of what corporate governance is. Keywords:SMEs, LuSEAltanative Market
Authors and Affiliations
Nsama Musawa, Clement Mwaanga, Mulenga Chilando
Keywords
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