Investigating the major financial factor affecting SME farmers based on the Copper Province when accessing Finance from financial institutions: A case study of Agriculture sector in Copperbelt Province in Zambia, Student Name: Victor Tangawarima Student Number: GSB901914 University Of Zambia Date: January 23rd 2022RESEARCH ABSTRACT ‘The paper outlines the challenges and opportunities which when understood better by the small and medium- ized enterprises (SMEs) to farming economy, their access to financing can be better. Financial institutions have common values and the same values if understood well by the farmers in the enterprise industry can better bridge the gap between the two sectors. The research was conducted on the Copperbelt province. SME s there actually experience challenges in accessing finance. It’s sad that most the previous research mostly talks about the challenges which small and medium enterprises face. However, this research took another angle to look at the challenges which the financial institutions face with this small and medium enterprises in the region of the Copperbelt, in Zambia, T e qualitative research employed surveys, interviews, and questionnaires based on the views and opinions of representatives of financial institutions. A sample of 40 representatives of financial institutions was used to form themes and statistical graphs to develop meaning from data. ‘The findings revealed that though collateral is a significant factor, market value of the SMEs product is the most i portant because, it realizes value. Market value of farm produce has ‘more value than loan collateral. When farmers invest in highly valuable items, which can highly be converted into a revenue, both the farmer and the financial institution realize value. When Grabbing collateral is not the primary objective, but value addition,CONTENTS 1.0 Research abstract 1.1 Research Background 1.2Problem statement 1.3 Purpose of Study. 1.4 Aims of Study . 1.5 Significance of Study. 1.6 Research Objectives 1.7 Research Questions 1.8 Scope of Study 1.9 Research Proposal Budget .. 2.2 Study limitations 2.3Ethical Issu 3.0 Literature Review 3.1 Introduction 3.1 Theoretical 3.2 Empirical 3.3 Conceptual framework 4.0 Research Methodology . 4.1 Sampling Techniques 4.2 Research procedures 4.3 Sample size 4.4 Justification For the Sample Size. 4.5 Questionnaires 4.6 Data Triangulation 4.7 Data Analysis 4.8 Ethical reviews 5.0 Research Analysis and interpretations 5. Investigating value of attitudes on financial access. 5.2 investigating value of Experience on financial access .. 5.3investigating value of collateral 5.4 Investing the value of market demand 5.5 Investigating the value of research proposal 5.6 Investigating the most significant value 6.0 Discussions and findings 6.1 Conclusions on Findings 6.2 Recommendations 6.3 Suggestions for further research 6.4 References 6.5 AppendixCHAPTER ONE 1.0 BACKGROUND ‘The problem regarding SME access to finance in Copperbelt is urgent. The devaluation of the reduced resource potential of financial sector is one of the key factors curbing SME access to finance, Factors that hamper SMEs in accessing finance are high interest rates for all business, heavy lending terms, and lack of lending institutions’ interest in providing finance to regions. ‘The importance of increasing financial inclusivity and financial literacy has recently become urgent in farmers on Copperbelt. The levels of accessibility for the country’s population and entrepreneurs, including SMEs, to services offered by financial institutions are not desirable. The agricultural sector in Zambia plays a key role in providing livelihoods for the country’s population. It continues to be the biggest employer in the informal sector and provides, the highest proportion of formal employment opportunities across all economic sectors in the country. Microfinance can be an effective way of extending financial services— including deposits, loans, payment services, money transfers, and insurance—to low-income farmers and micro and smaller enterprises. State-funded agricultural development banks or other state-funded programs are a common source of credit for farms, microenterprises, and SMEs that cannot access sufficient credit, either from friends and family or from commercial banks. Agricultural development banks also frequently provide finance to other financial institutions that serve the agriculture sector, such as rural banks and MFIs. Agricultural banks may provide support to build the capacity of microenterprises and SMEs so that they are eligible for credit from private financial institutions.Due to trade liberalization, Zambia has exposed local producers to tough competition from imports. The power outages being experienced in the country have put a lot of uncertainty in irrigated agriculture and in production of high value agricultural products. Despite Zambia being endowed with vast land, fertile soils, plenty of water and a favorable weather pattern that can support agricultural production and hence stimulate rural development this potential is never realized. For instance, market reforms have been made in ‘Zambia to stimulate private sector participation without addressing major constraints that hinder agricultural and rural development. These constraints include poor service delivery particularly for small scale farmers, marketing constraints especially in outlying areas as a result of poor infrastructure such as feeder roads, a void in agricultural finance and credit, unfavorable world and regional markets and poor accessibility and administration of land. Credit is believed to be the binding constraint in many cases related to agriculture project objectives, leading to the incorrect assumption that rural finance and agricultural credit are the same, Instead, rural finance encompasses the full range of financial services demanded by rural households, including loans, savings, payment and money transfer services, and risk management (¢.g., insurance, hedging, and guarantees). 1.2 PROBLEM STATEMENT Financial institutions have experienced challenges with access to finance. A lot has been head from farmers but little had been head from financial instructions. This research discovered new findings. Despite the crucial role of credit in agricultural production and development, farmers still have limited access to farm credit. The problem is statement is to understand the real issue with financial institutions towards SME farmers .Awoke (2004), noted that its acquisition and repayment are fraught with several problems especially in the small holder farming. Most of the defaults arose from poor management procedures, loan diversion and unwillingness to repay loans. According to Saleem and Janm (2014)various researchers have put forward the benefits, problems, access and role of credit for increased productivity. But prompt repayment of credit is necessary for good credit worthiness. In order to shift from subsistence to commercial agricultural production, access to finance is crit cal. Access to finance will enable the growth of the agricultural sector (The International Institute for Sustainable Development, (2015). Agriculture is a very important sector which not only plays a major role in poverty reduction and food security but also the creation of employment. However, the challenge in Zambia lies in working as a small-holder farmer (Ministry of Agriculture, 2020), Both in industrialized and non-industrialized countries, SMEs have been found to have less access to external finance and therefore struggle in their operation and growth, 1.3 PURPOSE OF STUDY The purpose of study was to investigate the main challenges financial institutions experience when they offer loans to farmers in the SME sector. Much of the research has been head from the farmers problems but the less has been head from the financial institutes. The main challenge was identified, and it will help to narrow the gap between the financial institutions and the farmers in the SME sector. Most of the SME farmers do not have the access to finance and the financial institutions have not given the opportunity to give farmers in the SME sector loans credit to support their business, That is , there is a challenge or difficult is a fact, but what is that challenge which if known, the farmers will work on it and can help prosper their business forward. And if Zambian farmers on the Copperbelt region can access financial support and their livelihood, provincial development can be enhanced. The development of the Towns can adjust to urbanization and contribute the national development by sustaining their lives without government support.1.4 AIMS OF STUDY The aim of the study was to extract the main reason why the farmers on the Copperbelt have had challenges when accessing the finance from the institutions that provide capital and other financial services to other business. The main aim was to investigate why financial institutions, favor other business ventures other than that of famers in the small and medium, enterprises sector. To operate profitably, financial institutions need a clear, reliable environment. Studying why SMEs in Zambia have difficulty in accessing credit or funding from financial institutions, perspective of the operators of these SMEs is crucial since it would present the problem from the perspec of the SMEs thereby making it a base line study for policy interventions by state agencies, development partners and non-governmental organisation with missions to develop the SME sector. 1.5 SIGNIFICANCE OF THE STUDY The study has now simplified the understanding of the challenges SME farmers experience when making efforts to access the finance. The actual factor which is so significant, among the financial institutions is now understood. SME farmers on the Copperbelt are able to ‘work together in order to provide financial institutions with what really matters to them and not just making efforts which have no value to the financial institutions. ‘The benefits of this research included increased productivity of Copperbelt based agriculture, reduced rural poverty rates in the region, increased regional food security, crop diversification, improved agricultural markets, less pressure on the Treasury stemming from. agricultural subsidies and Copperbelt emerging as a leading regional provider of agriculturalproducts. The primary beneficiaries are the Copperbelt SME farm dwellers because of the location. 1.6 RESEARCH OBJECTIVES The objective was to investigate the main challenges which financial institutions experience when offering financial products among the following factors ;collateral , farmers attitudes , value of the farmers experience , market value of the f m produce , soundness or effectiveness of the business plan 1.7 RESEARCH QUESTIONS ‘What is the major factor that values most to financial institutions when providing finance to agricultural SMEs in the Copperbelt region? ‘There are a lot of possible factors such as the market demand for agricultural products, soundness of the business proposal, the performance of agricultural product erience of the SME farmers, availability of collateral among others. Among the above mentioned the research explored and discovered the most valuable factor to the financial institution . 1.8 SCOPE OF STUDY ‘The study was conducted on the Copperbelt region among the financial institutes as targets sources of information to showcase challenges their have experienced with the famers under the ‘egory of SMEs. The province has five districts, and two cities and it is expected that most of them have had experience with the farmers. Among the information provided was the performance of their products, the negative outcome, which previously was not theirexpectations. ‘The main districts are Chililabombwe, Kitwe, Luanshya, Masaiti, Ndola, Mpongwe, Lufwanyama, Kalulushi and Mufulira districts. Ndola and Kitwe are the provineial districts headquarters and most of the financial institutions are based here, ‘The list of the financial institutions in the region are in the table below. NAME OF FINANCIAL INSTITUTION [No. OFBRANCHES | TARGET SECTOR ‘Zambia National Commercia Bank 16 ‘Agriculture Poultry Stanbie Bank Zambia limited 12 Agriculture general First National Bank 10 ‘Agriculture poultry ‘ABSA Barclays Bank of Zambia 3 Agriculture poultry National Savings and Credit Bank 10 ‘Agriculture poultry Tnvest Trust Bank Limited 3 Agriculture general Caymont Bank 4 Agriculture Poultry Farmers union 7 ‘Agriculture general Farmers and cooperative society limited [5 ‘Agriculture Poultry1.9 BUDGET ‘The budget catered for the transportation between cities and districts, at low prices. This involved only using public transportation. The was no much significant variance between the budgeted expenses and the budgeted results. 2.0 STUDY LIMITATIONS The study was conducted on the Copperbelt region, and it is only a province. As such it cannot represent the national or global perspective. Financial institutions behavior and the general economy are somehow related, When the Gross domestic product for the country improves, the circulation of money in the economy grows and that reduces the risk and demand for finance. The research was time sensitive as the future may be more technological and government policies may influence the market of poultry through subsidies, interest rates and embargoes. The research only concentrated on the financial institutions and not the SME farmers in the poultry sector. Some respondents did not have financial and agricultural backgrounds as the SME business sectors were not part of their products. 2.1 ETHICAL ISSUES This research was conducted in an ethical manner. I understand that most financial institution are privy with the information they hold, As such maximum integrity and confidentiality was implemented. The information that the institutions provided was only used for the purpose of this research and shall not be used for any other purpose. The research did request for names of institutions and other personal details of respondents managing the intuitions, The information and data only obtained from the willing participants who permitted me to conduct the research. The data and information collected was obtained in an objective ‘manner with questions customized to research questions only. The permission letter will disclose 10my stance on accountability of the information that I used where I acknowledged personal liability for data leakages in a case that the information shared is found with an unauthorized party . 13.0 CHAPTER TWO: LITERATURE REVIEW This chapter reviews literature on agricultural efficiency and highlights the importance of ial institutions. It reflects the contributions agricultural efficiency regarding values of the finan of the findings in other in Zambia, outside Zambia but within Africa and beyond. It defines the SME concepts in the poultry farming and various relevant types of variables; among them value of the business plan, importance of the SMEs experience, value of collateral and the significance of the market demand. Finally, it looks at related past studies on what matters most to value of financial institutions 3.1 Theoretical Framework Microfinance can be broadly defined as financial service provision to poor people in urban and rural areas. Microfinance only partly overlaps with rural finance, given that most microfinan sustomers are in urban areas. SME finance is the funding of small and medium enterprises. As outlined in the IFC (2022) SM Finance stocktaking report, the term “SM typically encompasses a broad spectrum of definitions across countries and regions. Agricultural microfinance refers to the provision of financial services to small farmers and poor rural households for agricultural production, marketing and proc: ing. The most requested items for accessing are provision of finance were as follows. Stanbic bank (2022) needs the following to finance agricultural project, busines financial statements, personal statements of assets and liabilities of all the partners, a 12-month cash flow forecast, the amount of own contribution, and the source of the funds, Schedule of debtors and creditors, past three months’ bank statements, members or directors, sales and 2purchases budgets, A projected income and expenditure statement. Financial institutions need similar documents and it’s considered an industry practice. Foundation for National community assistance (2022) demands the following from the SME farmers who request for loans, The bank statements business plan, community, or personal asserts, to securer the loan, Personal statements of assets and liabilities of all the partners. A projected income and expenditure statement. Financial institutions need similar documents and its considered an industry practice National farmers union (2022) needs the following to finance agricultural project, collateral, business plan, A 10 -month cash flow forecast, the amount of own contribution, and the source of the funds, bank statements, members or directors, sales and purchases budgets. 3.2 Empirical Framework Ministry of finance (2022), Providing financial access to the poor has always been a challenge due to various reasons. It is a known fact that most poor transact in small amounts, lack collateral, lack credit history and live in areas that are difficult to serve, mostly rural. On the other hand, the financial illiteracy of rural clients evidently restricts their decisions to use structure which can enable financial service providers to deliver their services and products to rural clients at a minimal cost is limited. Additionally, most low-income people work in the informal sector with high susceptibility to shocks and have irregular income. As such the level of risk on farming for financial intuitions may be too much to bear. Financial literacy may be a factor but skills alone without experience would also be an issue with the financial institutions. Financial institutions also need to do follow ups on SMEs 3however the challenge is that most of the SME farmers are rural based and may not be credible when providing finance. It’ is called the fungibility behavior which is explained by lack of follow-up services, such as training in financial management, savings and improved credit servicing (Mago and Costa, 2018). According to Provident & Zacharia (2008), investigated critical look at the role of microfinance banks in poverty reduction in Tanzania, the study based on questionnaires, semi structured interviews, observations and documentary reviews. The main findings of their study showed that majority of the poor do not access microfinance services loans because they lack ‘guarantors, assets, businesses, salaried employment, savings account in banks, ability to make pre-loan weekly deposit on Special Savings Account which are required as collaterals. The key factor was guarantee, either coming from an asset, as collateral or from salary. In Zambia, most of the SMEs do not have formal jobs, and this leaves collateral as a key source of guarantee, however its relevance to financial institutions in Zambia, and deserves to be investigated. Microfinance gives access to financial and nonfinancial services to low-income people, who wish to access money for starting or developing an income generation activity (Ojo, 2009) Olagunju and Adeyemo (2007) studied factors that determine loan repayment deci mn among farmers in Southwestern Nigeria during 2005.Data from 180 respondents were collected through multistage sampling technique. His results showed farming experience, farm location, cost of obtaining loan, visitation, borrowing frequency and education as important factors in determining loan repayment. Oladeebo et al (2008) examined socio-economic factors such as a mount of loan repaid, amount of loan collected and spent on agricultural production, annual net farm income, age, farm 14size cultivated, farming experience with credit use, and level of education influencing loan repayment among small-scale farmers in Ogbomosho agricultural zone of Oyo State of Nigeria Among them amount of loan obtained by farmers, years of farming experience with credit use and level of education were the major factors that positively and significantly influenced loan repayment. Most Zambians are educated and they are able to understand basic arithmetics , interest payments , and other areas that may be used to assess literacy and this leaves farming experience an area that would require investigation as farming in Nigeria and Zambia may be slightly different in that Nigeria has different cultures and vegetation is not the same as Zambia , and the research di not specify the specific area of farming , when the proposal is specifically in poultry, Kohansal at al (2009) studied the factors influencing on repayment performance of farmers in Khorasan-Razavi province of Iran during 2008, Results showed that farmer's experience, income, received loan size and collateral value have positive effect on loan repayment. In Zambia, demand for the product is also relevant. An experienced farmer, with expensive collateral, who intends to in farming products that do not have market would not likely make a sale in the Copperbelt because the produce may be demand less. This research will also investigate the value of product demand on financial institutions when providing finance to SME poultry farmers, Koopahi and Bakhshi (2002) Identified defaulter farmers from no defaulters of agricultural bank recipients in Iran by using a discriminate analysis. They found use of machinery, length of repayment period, bank supervision on the use of loan had significant and positive effect on the agricultural credit repayment performance. The research was trying to 15explore the reasons why farmers default, acknowledging the fact that its serious issue that affect, financial institutions. However, our local SMEs in Zambia, on the Copperbelt region, default on Joans and barely have machinery. Financial institutions would probably use that machinery as collateral in Zambia. Eze and Ibekwe (2007) studied determinants of loan repayment under the Indigenous Financial System in Southeast, Nigeria During (2005). 180 respondents were selected randomly. for primary data collection, Data were collected by means of questionnaire and observation, Descriptive statistics and multiple regression techniques were used for analysis, The research acknowledged that experience of the small and medium enterprise can affect loan repayment. In this research, value of on financial institutions experience with that of SMEs was be explored. 3.3 Conceptual framework Among the variables, the adequate business proposal, the power of collateral, market ‘demand for the SMEs farm product, experience of the farmers matters most to the financial institution , as key items to for look out and should be able to guarantee or warrant business profit. eer el Laake alias Perce DC eau autocad aE UTar ly 16One of the above factors should be able to be the priority to financial institutions and when SME farmers do the math, they will know values most and can well be guided to obtain finance, The most important factor t the financial product, is basically any product that can be profitable. 74.0 CHAPTER FOUR: METHODOLOGY This chapter provides the detailed research methodology that was adopted in the study It addressed the research design, population and sampling design used in the study. The chapter further discussed the data collection methods, research procedures and data analysis methods that were be implemented. 4,1 Sampling Technique ‘Though the invitation letters were sent to all parts of the districts and the two cities, ‘Ndola and Kitwe, the method of convenience sampling was employed in arriving at the 40 SMEs, which the researchers believe helped the confidence relevant for this study and who have sufficient time and were willing to participate. This technique, convenience sampling, involves obtaining responses within the sample frame from willing respondents and their availability for the study. The advantage here is that respondents participated on their own volition and not selected against their will. This technique was chosen to boost response rate because respondents in this sector are reluctant in giving out information, because they worry information about their businesses may leak through to competitors and potentially exposed them to tax authorities. 4.2 Procedures After deciding on the target population, a list of SMEs was selected. The various SMEs that agreed to be part were subsequently contacted and given a brief about what the study seek to achieve through the means of telephone. After getting the required number for the study, the questionnaires were dispatched. The respondents were given two weeks to complete the questionnaires, before live interviews were conducted so as to give them ample time in giving out the right responses. 184.3 Justification of the sample size Because the emphasis of this research is on quality rather than quantity, the objective is to maximize numbers but to become “saturated” with information on the topic. The aim was to capture depth and richness rather than representativeness. The interviews ware complemented with secondary information to assure the adequacy of the data. The reason to conduct 40 interviews on the demand-side includes a limited budget, accessibility to the financial institutions, the willingness of participants to speak freely with the interviewer and data saturation. ‘The participants were given informed consent, forms to read, ask any questions related to the study and sign the forms before the researcher could commence with the interview. All the questions were translated into the language the interviewee was willing to choose. The interviewing was performed in the interviewees’ places of work, or locations they will deem appropriate, The interviews were both written down on notes, with the agreement of the interviewees, then transcribed for analysis and the anonymity of the participants were maximized 4.4 Questionnaires Qualitative data are those collected, analyzed, interpreted by observing what people do and say (Ngechu, 2006). A questionnaire is a carefully designed instrument for collecting data in accordance with the specifications of the research questions and hypotheses. It elicits written responses from the subjects of the research through a series of question/statements put tighter with specific aims in mind. The questionnaire may be used to ascertain facts, opinions, beliefs, attitudes, and practices. As such the questionnaires was distributed coupled with live interviews. ‘A questionnaire was used to explore the key research question. 194.5 Data Analysis Techniques Data gathered from this research was analyzed using tables and graphs. 4.6 Reli ity and Validity (triangulation) Qualitative credibility is achieved through practices including thick description, triangulation crystallization, multivocality and partiality. This study provided a thick description of the data and will be used for triangulation methods to ensure its validity. For construct, validity, multiple sources of evidence, namely interviews, secondary data and document, analysis, was to be used. The secondary data provided the necessary information to make cross-references for the inferences from primary data. Triangulation facilitates validation ion from more than two sources. It tests the consisten: of data through cross verifi of findings obtained through different instruments and increases the chance to control, or at least assess, some of the threats or multiple causes influencing our results. 4.7 Ethical considerations Highly ethical standards were applied by making sure that information obtained was confidential where needed and procedures of getting data will done in a professional manner in order to avoid plagiarism and protect intellectual property rights; bias were avoided. 205.0 CHAPTER FIVE: ANALYSIS AND INTERPRETATIONS, 5.1 Investigating Attitudes of Financial Institutions on SME Farmers The research assessed the attitudes of the financial institutions on SME poultry farmers. ‘The findings revealed that most financial institutions feel that most of the times, collateral of the farmers will be grabbed because they are more likely to default on the loan. 75% of respondents felt that collateral can be grabbed. 70% of respondents felt that most farmers would cancel their loans or finances because they lack adequate plans. Regarding fulfilling the financial obligations of the finance most respondents said only 10% would fulfil the obligations of finance. Before a loan is acquired by the famer, the probability that they do not default is 20%. Based on the past, most enterprises said 15% would come with financial plan and the risk endowed with the product is 85%. Most of the respondents said that products aimed at SME poultry farmers would yield a low profit and the loan would not be paid on time. 70% feel that the loan has low profits and 70% feels that the loan would not pay on time. This concludes that the financial institutions are negative about SME farmers based on the time and activities they have experienced with them. Source (2022) 21‘The research further explored the satisfaction on the financial institutions regarding their SME poultry farmers. 70% of the respondents said they would remove the products owing to low profitability. Only 30% described the financial products aimed at future to bear about 30% confidence in the future performance of the products. To describe the experience of their relationship with SME farmers, 70% described the experience to be poor in that product performance, failure to professionally communicate, in comparison with other customers. Regarding recommendation, 20% said they would recommend while the other 80% said they would not. The level of satisfaction in terms of business proposals investments and collateral behavior, including court cases, spell that most financial institutions are not pleased with the behavior of SME poultry farmers. Below is the table that summaries the findings of the research, then tabulated in to the charts SATISFACTION CoML a oaay GEA EXPERIENCE WITH FARMERS a Cag eon rare eZ Source data (2022) 25.2 Investigating The Effect of Experience On accessing Finance With regard to the literature, on farming, experience of the SME in farming business spell that experience is a significant factor. Most of the financial institutions agreed that experience is significant, and this was represented with 70%. However, respondents complained that most emerging SMEs are not experienced. Only 40 % have experience and its difficulty to justify. On the other hand, financial institutions showcased some confidence in the combination of experience and loan defaulting saying that the chances of loan defaulting by an SME enterprise it at least two years of experience, was 50% meaning that the score was shared, among the respondents. How they interpreted the score on risk from an experienced SME poultry farmer, and that the loan would not be defaulted at was at 30%. This spells that the confidence on experience is low. Below is the chart to reveal the findings the chart Source data (2022) 235.3 Investigating the Effect Of Collateral Collateral was also investigated in relation to the research question. the number of respondents that believed collateral is important were 70%. They said and appreciated the value of collateral on the security of the financial product. The frequency of times farmers opts to offer collateral or secure their finance with collateral, implying that 70% are no willing would resist to secure the loan o financial product. The adequate or evaluation of collateral is an issue in that the value which SME s attach to their property and the value which financial institutions place on their property is unequal in most cases. The financial institutions normally place the value lower than the customers perspective because they include the challenge to put the assets in liquid or cash form as the finance product is. Sufficiency of the collateral would spell the direct value of the. According to the financial institutions, only 20% would provide the collateral that is adequate and only 25% offered collateral that was sufficient. When rating how significant collateral is to the financial institution, 70 % rated financial institution to be very important, especially with medium and small and enterprises. 24Source data (2022) 5.4 Investigating The Effect of Market Demand on Financial Access ‘The research also investigated effect of market demand on the ability of the financial institution to offer finance. If the financial product has very high chances of being sold and formal documents are present such as a salary , Then it becomes reliable for the financial institutions to offer the finance. If market demand for the product is low, the risk of business becomes high inspite of the collateral available. The purpose of providing an SME in poultry farming is to promote a business. The research investigated the challenges which would affect the marketing of the poultry products. It was found that the need for license as a requirement to manage a business was minimal; only 10%. The strength of the monitors to ensure that regulations are followed was 20%. The other respondents (80%) said the regulation is weak. 70% provided key feedback on the time and agreed that the time to sale poultry stock is minimal. ‘The cost of establishing the market was also found to be very minimal. It was found to represent 20% of the cost . 80% of respondents agreed that demand is high. 25NEED FOR A LICENCE STRENGTH OF REGULATION TIME TO REPLENISH ESTABLISHING MARKET (COST OF MARKETING DEMAND FOR PRODUCT o% MARKET DEMAND (EN 10% LL 7. «x 10% 20% 30% 40% 50% «GOK 70K BOK «90H, Source data (2022) 5.5 Investigation on The Value of The Business /Proposal When Accessing Finance The value of business proposals was also assessed, and the findings were as follows. The number of times when financial institutions were presented with business plans was on average 70% said they had not been presented with any business plan by the respondents. 50% Said they had assisted the customers with the development of the business plan. This spells that inspite of bearing a business plan, half of them need assistance. However, the importance of the business, plan or proposal is that that it guides the financial institution on the ability and success of the potenti business, and this would secure their loan or finance. 80% said it’s a valuable item, The chart below summarized the findings of the study the value of the business proposal 26Source data (2022) 5.6 Investigating the Most Significant Factor When Accessing Finance This part of this research presented the most significant factor that values to financial institution when providing finance to SME poultry farmers. The respondents revealed that the ‘most challenging issue is the market demand which matters most, When they assess the market, for livestock and related poultry products, they can judge the performance of the business plan the formulation of business plans which was given the value of 10% could be prepared by any with possible falsification, Even if the business plan or proposal is excellent, the economic forces ‘would still command the value. These forces are the demand for the product. A farmer might have the experience of 100 years, but the economic forces would command the price and demand. The respondents, financial institutions, was represented by 50% of those who agreed ‘that market demand for the product was the most important of all. Experience of SME poultry 7farmers and their collateral was level in terms of value with 20%. The chart below summarized the findings. Source data (2022) 6.0 Discussions on the findings The most valuable factor for the financial institution s was compared between collateral and product demand. the financial institutions favored product demand and said collateral is not the essence of business but the market value of the SMEs product demand on the market. Collateral only acts as security and most SMEs do not have so much valuable assets to offer. As such financial institutions on the copper belt use economic estimates to predicate the behavior of the market in terms of demand and supply of livestock and related poultry products. When interviewed most of them aid product market value matters most tis security. Remove collateral, the business will likely fail if the offering has less demand, As such market demand is the most 28challenging factor for the financial institutions which they face with SME enterprises in the poultry industry. 70% 30% 6.1 Conclusion on the Findings Source data (2022) In conclusion of this research, one should be able to tell the value of the product market. Itrelates to the value of the products on the open market. Financial institutions conduct what they call feasibility studies on the market to test whether the product which the enterprise wants to bring on the market can sell or as high demand such that will approach to the market it can attract a lot of customers and again it can bring value to the business owner. On the other hand, collateral is equally important however it is not as important as product market. The reason is, that the motivation of financial institutions is not to grab the property of SME farmers but to develop value from what they have on the market at large. The main interest of financial 29institutions when they provide finance is that the business of an enterprise that is seeking a loan or finance should prosper and not to grab the collateral that itis able to provide. The main aim of the collateral is just to provide a security or insurance for the loan or for the finance which has been accessed by the customer or in this case is small and medium enterprises in the poultry farming on the Copperbelt. 6.2 Recommendation on the study 1. This study was only conducted on the probability among the poultry farmers under the category of small and medium enterprises how have ideas recommended that similar research can be conducted in another province especially southern where go to keeping and a lot of enterprises are based with challenges to reach financial institutions. 2. The sample size for the research was only 40 respondents in a region as such I can recommend that a larger sample size is conducted in different areas and countries to investigate if the results can be there similar. 6.3 Suggestions for Further Research T can also recommend that this study can be conducted in a country or developed countries as you may know the situation for Zambia with a low gross domestic product in comparison to other countries. In developed countries where are systems processes are well established the value of collateral, most likely can be very low because all the advanced systems processes availability of technology in other countries. 30REFERENCES Awoke, M.U, (2004) . Factors Affecting Loan Acquisitioned Repayment Patterns of Smallholder. Ezeh, C. 1, & Anyiro, C. ©. (2013). The impact of micro financing on poverty levels of rural women farm households in Abia State, Nigeria. 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Stephen Mago, Costa Hofix,( 2018) Microfinance as a pathway for smallholder farming in Zimbabwe, Environmental economics Journal, Zimbabwe. 32Student Name: Victor Tangawarima RESEARCH QUESIONNARE Student Number: GSB901914 FORTHE PROPOSAL MBA Negative =Between 40 and above , Moderate=Between 30 and 39, Positive =Between (21 and 29), Very positive =Less than 30 pe. 1Student Name: Victor Tangawarima Student Number: GSB901914 aS RESEARCH QUESIONNARE FOR THE PROPOSAL MBA Impressed =41 and 50 , Satisfied =Between 31 and 40, Somehow Disappointed =Between (21 and 30) , Disappointed =Less than 10 and 20 INVESTIGATING THE SATISFACTION OF THE 5 a 3 2 7 PERFORMANCE 1 | How satisfied are you with loan products from SMEs poultry | Very Fair Neither | Disappointing | Very farmers? Disappointing oS eS Ss S o 2_| How likely are you to recommend loan products from SMEs? | Very Likely _| Mostly | Neither _ | Unlikely Never eS cI o a oI 3_| How do you rate farming loan products among other products? [Excellent | Good __| Fair Poor Bad i] = oS i= o 4 | On your product line, how do you rank SME poultry farming? | Very Important | Moderate | Not important | Useless important oa eS SS So So 5_| rate the experience with SME farmers on loan repayment? Excellent | Good _| Fair Poor Bad oO Oo So SI o 6_| How likely are you to continue Serving farmers with finance | Definitely __| sure No. Maybe Never oo ao a oa oa 7_| Do you consider eliminating them from your product line Never Maybe | NO. Sure Definitely o o eS i] o 8_| How do you rank them with other products Very High [higher Average _| Low Very Low o a oa So oa 9 | Do they waste your time No Kind of __| Somehow | Yes Big time o o oS o 70 | in future would they perform better or improve Yes Maybe | Somehow | Not sure Unlikely = o S Sa o pe. 2Student Number: GSB901914 FOR THE PROPOSAL MBA Student Name: Victor Tangawarima &S RESEARCH QUESIONNARE How do you value the experience of the SME poultry business owners? ® ‘Owners of the farmers hold at least two experiences in the Occasionally Sometimes related? How do you rate experience in the poultry farming? Very Important Not Important 2 2) How do you classify most of the farmers, seeking investment | Experts masters novices in the farming? @, & e How likely i it that when a SME poultry farmer defaults, he | Very-Rarely Neutral” Likely” has experience? ® ® How likely is that when an SME poultry farmer defaults, he Neutral unlikely has no experience? @ Experienced farmers unlikely default Strongly agree neuat ® Experienced farmers are less risk Strongly agree neuttal 2) Unexperienced farmers are risky ‘Very unusual Sometimes a Experienced farmers are more realistic and optimistic frequently neither e y Impressed =41 and 50,, Satisfied =Between 31 and 40, Somehow Disappointed =Between (21 and 30) , Disappointed =Less than 10 and 20 pe. 3Student Name: Victor Tangawarima Student Number: GSB901914 RESEARCH QUESIONNARE FOR THE PROPOSAL MBA Impressed =41 and 50 , Satisfied =Between 31 and 40, Somehow Disappointed =Between (21 and 30) , Disappointed =Less than 10 and 20 INVESTIGATING THE VALUE OF ADEQUATE BUSINESS PLANS | 5 4 3 2 T T_| Whats the value ofthe professional business plan ofan SME poultry __| Very important |Somehow | Not useless farmer? important important _| important © © © O Z_[ Do most ofthe poultry farmers develop adequate business plans? Mostly [regularly [occasionally | irregularly | rarely Oo © © oe © 3 _| How frequent do farmers produce adequate business before accessing | Very Quite offen | Usually, | unusual Very finance? often unusual e © © © 2 “@_| How satisfied are you with Business plans by farmers they mostly Very Moderately | Ordinarily | Disappointed | Very produce? satisfied satisfied poor oe © ° © e 5__| Do you consider business plans by poultry farmerstobeinadequate? | No ‘Alittle bit__[ Not sure Maybe | Yes es e O ° © 6 _| How often do you assist farmers in developing business plans or them to | Very Quite often | Occasionally | usually, Very access finance? often unusual 2 s O 2, 2 7 _| What isthe value ofthe professional business plant ofan SME poultry | Very important [Somehow | Not useless farmer? important important _| important s U 2 O e) @ | Do most of the poultry farmers hold develop adequate business plans? | Very Quite often. | Occasionally | usually, Very often ‘unusual 2 s 2 © Oo '9_| How frequent do farmers produce business plans when accessing Very Quite often | Occasionally | usually, Very finance? often unusual © © © O oe 0 _| How satisfied are you with business plans by farmers they mostly Very Moderately | Ordinarily | Disappointed | Very produce? satisfied satisfied poor e © 2 ° © pe. 4Student Name: Victor Tangawarima Student Number: GSB901914 RESEARCH QUESIONNARE FOR THE PROPOSAL MBA Impressed =41 and 50 , Satisfied =Between 31 and 40, Somehow Disappointed =Between (21 and 30) , Disappointed =Less than 10 and 20 INVESTIGATING THE EFFECT OF COLLATERAL 5 a 3 z z 1_| Do you require back up when SME poultry farmersneed finance? | Mostly _| regularly ___| occasionally _| irregularly | rarely 2 | What is the value of collateral when a customer is securing a loan? | Very important Somehow | Not Useless important important _| important 3_| Do SME poultry farmers come with sufficient collateral? Frequently | Occasionally | Rarely Never _[ Never @_| Do SME farmers secure their loans with collateral? Mostly | regularly | occasionally _| irregularly | rarely 5 | What do you value do you attach to collateral by SME poultry very important [Somehow | Not Useless farmers? important important _| important 6 | isthe collateral attached used by SME poultry farmers adequate? | Mostly [regularly | occasionally _| irregularly | rarely 7_| Do most of the farmers meet the standard of required collateral? _| Mostly regularly, ‘occasionally _| irregularly | rarely 8_| Do you require back up when SME poultry farmers need finance? | Always | regularly __| Occasionally_| irregularly | rarely 3. | What's the value of collateral when a customer is securing aloan? | Verv High | High Moderate | Low Very Low 10 | How frequent do you need collateral? Always | Occasionally | Rarely Never | Never pe. 5Student Name: Victor Tangawarima Student Number: GSB901914 > RESEARCH QUESIONNARE FOR THE PROPOSAL MBA ‘THE EFFECT OF MARKET DEMAND 5 4 3 2 1 T_| How is the demand for poultry farming products in this _| Very High | High Moderate | Low Very Low region? 2_ | How easy do poultry farmers find market for their farm | Very Easy | Quite Easy | Fairly Tough | Very Hard produce? Eas, 3 | All things normal, do poultry standard products at, Never | Rarely Neutral | Sometimes | Mostly common price last on the market? 4 | Compared to other goods, how quick are poultry Very Nonmal ‘Average | Slow Very Slow products sold? 3 | Do poultry products require heavy marketing to be sold _| Rare Occasionally | Quite Often Very Often in this region? Often 6 | How easy is it to establish a poultry market fora SME | Very Easy | Quite Easy | Fairly Tough | Very Hard farmer? Easy 7_ | How strong are the regulations on the poultry products _ | Very Quite Fairly Weak Very Weak on this region? 8_ | How often are practising licences checked by regulators? [Never | Rarel Neutral [Likely | Very Likel 9 | How is the demand for poultry farming products in this | Very High | High Moderate | Low Very Low region? 10 | How is the cost of marketing in this region for poultry | Marginal _| Low Fair High Expensive products Impressed =41 and 50 , Satisfied =Between 31 and 40, Somehow Disappointed =Between (21 and 30) , Disappointed =Less than 10 and 20, pe. 6Student Name: Victor Tangawarima RESEARCH QUESIONNARE Student Number: GSB901914 FOR THE PROPOSAL MBA MAJOR FACTORS AFFECTING FINANCIAL INSTITUTIONS 1. Given that the demand for poultry is high, would you consider collateral to be important? 2. Given that market demand is low would you consider collateral to be important? . Given that the SME poultry famer does not have an adequate business plan, but market demand is high, would you provide finance? 4, Given the SME poultry famer, is inexperienced but demand is high, would you provide the finance? 5. Given that the SME poultry farmer does not have, an adequate business plan, but with collateral, would you provide finance? 6. Ifthe SME poultry farmer has an adequate business plan, with collateral but without experience, would you provide finance? 7. In order of importance rank the following variables on the SME poultry business. Experience, business plan, collateral, market demand. 8. Given that the farmer has sufficient experience, adequate business plan, and the demand for product is high, but without collateral, would you provide finance? 9. Which of the variables would you eliminate last among following, Experience, business plan, collateral, market demand? 10, From the SME poultry farmer, is product profitability your main objective? 11. Given that loan product has high profit potential, would you sacrifice collateral? 12, In what circumstance would you sacrifice collateral? 13, In what circumstance would you neglect experience and adequacy of the business plan? 14, Between collateral and market demand market demand, which one can you do away with? 15. What is the major factor that you the financial institution face with the SME farmers? pe. 7Student Name: Victor Tangawarima Student Number: GSB901914 RESEARCH QUESIONNARE FOR THE PROPOSAL MBA pe. 8