Global Journal of Management and Business Research, B: Economics and Commerce, Volume 23 Issue 1

According to king and Levine (1993), there seemed to be a positive relationship between the size of the financial sector and economic growth. Access to credit by both individuals and business houses, have been positively associated with asset growth, investment and overall economic growth. Microfinance offered the following services basic financial services such as loans, savings, money transfer services, micro insurance etc. The products help the people to run their businesses, build assets, smooth consumption and manage risks. The poor people in the communities address their financial needs through variety of informal relationships. The credit is always available from informal money lenders at a higher cost to borrowers (CGAP, 2006) The savings services available through a variety of informal relationships like savings clubs, rotating savings and credit associations and other mutual savings societies in local language called village banking. Although these clubs tend to be erratic and somewhat insecure. Traditionally, banks have not considered poor people to be viable market, rendering the SME sector to continue experiencing difficulties in accessing financial services. The SMEs don’t have adequate know how information and research and development to innovate and remain competitive. Their limited international market exposure, low product quality, default in compliance with standards, and little access to international partnerships impede SMEs participation into global markets (BDSF, 2008). In addition, insufficient distribution channels often dominated by large firms also make difficult for SMEs to access financial markets. For now, there is an established, yet growing recognition of the importance of micro, small and medium scale enterprise (MSMEs) in sustained national economic growth, therefore little attention has been given to that sector of the economy. II. B enefits M icrofinance P roducts and S ervices to C hazanga C ompound a) Employment When the entrepreneurs borrow, they create employment or opportunities for others. An increase in the employment benefits the local economy as the money circulates through local businesses and services in Chazanga compound. b) Improvement of Businesses The provision of microfinance products and services in the compound has greatly helped the businesses to upscale their business operations by offering immediate financial resources and capital accumulation. and reduce the chances of early marriages and teen pregnancies in the compound, thereby increase their chances of completing school would increase and hence more likely to obtain a fair paying job or higher education. d) An Opportunity to Receive Education The children of the economically weaker families’ miss education days due to agricultural activities and selling at the market so that they can earn help the family financially. Therefore, microfinance product and services aid such children by providing the funds to meet the financial needs of the families. That would give the opportunity to the children to complete their education. e) Help in Reducing High Rate of Alcohol Consumption and Abuse Most compounds in Lusaka are densely populated, lack social amenities, clean drinking water and don’t have enough entertainment ventures, so the source of entertainment for the youths is engaging in illicit activities like beer drinking, prostitution, criminal activities and smoking dagga. The microfinance companies provide the small loans to businesses in such localities, most of the youths will have something to do or will be employed by most of the entrepreneurs enabling them to stay away from illicit activities and alcohol consumption. f) The Possibility of Future Investments Increase Poverty is a perpetual cycle. The scarcity of money results in lack of food and water, leading to lack of sanitary living conditions and malnutrition and illness. The microfinance products and services break this cycle by making more money available. Once the basic needs are met in the compounds, the people would think of the possibility of future investments because the people meet their basic needs. III. F indings This part of the article presents the actual findings from the field work, analysis and discussion of data presented in both qualitative and quantitative status. The results were based on the study which was conducted in Chazanga compound of Lusaka urban district. During the research expedition, the main aim was to establish the benefits the SMEs derive from microfinancing on small businesses, growth, expansion and survival in Chazanga compound of Lusaka urban District. In the findings, it was learnt that the survival of the SMEs depended largely on whether the enterprises were able to generate the profits from the use of micro c) Reduction of Early Marriages in the Compound When the economically weaker families have access to credit at an affordable rate, the girl children in the community will be able to receive formal education funds and easy access to micro credit. That was evidenced by all the SMEs who obtained microloans doing well and expanding their businesses. Benefits the SMEs Derive from Microfinance Institutions on Empowerment and Poverty Alleviation in Chazanga Compound, Lusaka, Zambia Global Journal of Management and Business Research Volume XXIII Issue I Version I Year 2023 ( ) B © 2023 Global Journals 14