The Role of Investment Appraisal Techniques in Enhancing Financial Sustainability of Small and Medium Enterprises in Solwezi, Zambia

Michael Kaoma, Erastus Mwanaumo and Michael Kalumbu Nsefu
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Michael Kaoma: University of Lusaka
Erastus Mwanaumo: University of Zambia
Michael Kalumbu Nsefu: University of Lusaka

African Journal of Commercial Studies, 2025, vol. 6, issue 6

Abstract: This study investigates the role of investment appraisal techniques in enhancing the financial sustainability of Small and Medium Enterprises (SMEs) in Solwezi, Zambia. Despite their economic importance, SMEs in Zambia face high failure rates, with financial sustainability being a key challenge. The research employs a sequential explanatory mixed-methods approach, combining a quantitative survey of 280 SMEs with qualitative interviews of 20 key informants. Financial literacy of owners/managers, financial sustainability, decision-making processes, and the political environment emerge as critical factors influencing the adoption and application of these techniques. The study finds a significant positive relationship between the frequency of investment appraisal technique usage and SME financial sustainability (β = 0.303, t = 2.367, p

Keywords: Investment appraisal techniques; financial sustainability; SMEs (search for similar items in EconPapers)
JEL-codes: G31 L26 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsk:2025-16

DOI: 10.59413/ajocs/v6.i6.17

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