Factors Affecting Listing of Small and Medium Enterprises on LuSE Alternative Investment Market in Zambia: A Case of Lusaka Business District
Authors:   Zcas University School of Business, Department of Banking and Finance, Kawimbe Sidney 
Published: October 2022

Economic growth in both developed and developing nations is strongly linked to the growth of alternative investment markets. Alternative markets for the listing of start-up companies have been established and launched by many exchanges in order to assist small and medium businesses in raising finance through initial public offers and listing their shares for trade. The rise of these alternative markets has been slow, particularly in poorer countries. The study’s major goal was to discover the characteristics that influence SMEs’ ability to list on the Lusaka Stock Exchange Alternative Investment Market (LuSE AIM). Examine whether information accessibility is a critical factor in determining SMEs listing on the Alt-M; determine if regulatory requirements are a factor to consider when SMEs decide to register on the AIM; determine if corporate governance is an important factor in determining SMEs listing on the AIM; and determine if SMEs support platforms are important factors in determining SMEs listing on the AIM. The study used a quantitative cross-sectional design using a survey as the research approach to attain this goal. The approach was deemed appropriate and useful towards assessing of the elements influencing listing of SME firms on the securities exchange. The population of the study included all 1663 SMEs registered under Zambia Chamber of Small and Medium Businesses Association in Lusaka. Stratified sampling technique was used for the study where random sampled quotas were selected from each industry. The sample size of SMEs derived 322 companies and only 161 SMEs successfully participated in the study as respondents. Primary data were used to obtain information in this study using closed-ended questionnaires. To identify the characteristics that influence the listing of SMEs on the stock market, the study used quantitative analysis and factor analyses. The parameters that determine the listing of SMEs on the Alternative Securities Market were identified using factor analysis. Factor I (information accessibility), Factor II (regulatory needs), Factor III (business governance), and Factor IV (corporate governance) identified as the four elements (SMEs support platforms). Information accessibility, enabling legislative requirements, sound corporate governance, and SMEs support platforms were identified as the barriers to small and medium firms receiving finance through the LuSE Alternative Investment Market, according to the conclusions of the research study. The findings of the study suggest that availability to information is critical to listing, and that a regulatory environment that is friendly to small and medium firms will encourage them to list. Furthermore, while corporate governance is not a prerequisite for SMEs to list, good corporate governance practices have been proven to promote SMEs to list. According to the survey, relevant authorities should educate SMEs on the critical information required for securities market listing so that they may make educated judgments. Policymakers should make it easier for SMEs to expand by enacting favorable policies and making it easier for them to list on the AIM. Corporate governance regulations should be tailored to the structure and environment of SMEs by policymakers. The government should develop an atmosphere that includes support systems tailored to SMEs. Putting support platforms in place increases SMEs’ desire to list.