About 72% of businesses in Zambia are not able to raise funds for expansion due to the effect of the COVID-19 pandemic, a research released on Tuesday showed.
The survey, conducted by the Zambia Financial Sector Deepening Limited (FSD) in collaboration with BFA Global, said the small and medium-sized enterprises (SMEs) in Zambia critically needs working capital because three-quarters of them were unable to raise capital.
The research further established that about 40% of the firms were seeing a significant drop in revenues due to the COVID-19 pandemic.
Eneya Phiri, the organization’s head of communication, said in a release that the research was aimed at understanding the economic situation from the perspective of SMEs.
The research was also undertaken to assess the digital readiness of the firms as a method to limit the impact of COVID-19.
Betty Wilkinson, the organization’s chief executive officer, said the issue of working capital was key for the small firms to stay alive through the challenging period posed by the pandemic.
The organization will be looking for options to help financial institutions grow working capital loans and expand on working capital access projects to help the small firms to survive and grow.
In March, Zambia’s Ministry of Health has confirmed the first two novel coronavirus cases in the country.