Supporting SME Early-Stage Business Development: A Case Study of Prospero Limiteds Business Services Initiative

Abstract

Small and Medium Enterprises (SMEs) play a vital role in Zambia’s economic development, yet early-stage businesses face significant challenges, including limited access to financing, regulatory compliance difficulties, and operational inefficiencies. These barriers hinder SMEs’ ability to scale and contribute to sustainable economic growth. Investment facilitation programs, such as Prospero Limited’s Business Services Initiative (BSI), have emerged as critical interventions designed to support SMEs in overcoming these obstacles. However, the effectiveness of such programs in fostering business development and investment readiness remains underexplored. This study examines how Prospero’s BSI assists SMEs in navigating Zambia’s regulatory requirements, securing funding, and enhancing operational efficiency. A mixed-methods approach was employed, incorporating qualitative and quantitative data from 12 SMEs across various sectors. Semi-structured interviews were conducted with 33 respondents, including CEOs, financial officers, and project managers. Findings indicate that BSI significantly improved SMEs’ investment readiness, financial management, and regulatory compliance. Businesses benefited from customized financial controls, milestone-based funding, technical assistance, and infrastructure investments. Examples include Okavango Foods Limited and Fresh Point Fruit and Veg Ltd, which enhanced financial reporting through QuickBooks training, and Pahama Agro Limited, which improved storage facilities to reduce post-harvest losses. Despite these successes, internal capacity limitations and regulatory complexities posed challenges, which SMEs addressed through phased implementation and capacity-building support. This study concludes that investment facilitation programs like BSI play a crucial role in SME growth but require enhanced sector-specific support and stronger financial linkages. The findings contribute to the discourse on SME development, offering insights for policymakers and stakeholders aiming to improve Zambia’s entrepreneurial ecosystem.