Workshop ‘Qualitative Research into the Implementation of the Determinants of Successful Repayment of Microloans in Zambia’

The workshop was moderated by Dr. Progress Choongo (CBU), Dr. Mwansa Chabala (CBU) and Prof. Enno Masurel (VU).

According to the World Bank, Zambia ranks among the countries with the highest levels of poverty in the world. Microloans and entrepreneurship development play important roles in addressing this poverty. However, entrepreneurs who are unable to repay their microloans can face serious difficulties, including the loss of collateral, e.g., their homes. This makes the successful repayment of microloans an important issue. Nevertheless, relatively little is known in the academic literature about the determinants of successful microloan repayment. This workshop aimed to help close this knowledge gap.

This workshop was a sequel to the workshop ‘Qualitative Research into the Implementation of the Determinants of Successful Repayment of Microloans in Zambia’, which was organized at CBU in July-August 2022. That workshop resulted in the following findings concerning the determinants of successful repayment, based on extensive qualitative research conducted by CBU lecturers:

1. The cashflow management capabilities of the entrepreneurs need to be improved through training.
2. The business planning capabilities of the entrepreneurs need to be improved through training.
3. The characteristics of the microloans offered by the Micro Finance Institutions (MFIs)/banks should be made more flexible to better accommodate entrepreneurs’ circumstances.
4. The policies and attitudes of the MFIs/banks should place greater emphasis on building personal relationships with entrepreneurs.

Four years after the first workshop, there was a need to further operationalize these findings. CBU and VU therefore joined forces again to investigate how the four determinants of successful microloan repayment could be implemented further in practice. In addition, there was a need to train a new group of CBU lecturers in qualitative research methods.

Fifteen people, from different CBU schools, joined this workshop (five women and ten men). In addition, several other people joined parts of the workshop. All 15 participants conducted an interview with a small business entrepreneur who had a micro loan. They transcribed their interviews and, ultimately, developed a list of first-order codes. The moderators then clustered these first-order codes under the four determinants. Subsequently, the participants worked in four groups to transform the first-order codes into second-order codes. Each group then identified a number of overarching themes that could serve as a basis for further practical implementation.

One of the main themes related to entrepreneurs’ cashflow management capabilities of the entrepreneurs was cash flow awareness: the ability to recognize that cash flow problems or opportunities may arise in the near future, either positive or negative. Another theme was the choice between transferring surplus cashflow to the own household or reinvesting it in the business.

One of the main themes related to business planning capabilities of the entrepreneurs was the need for diversification to make the business less vulnerable, by spreading risks across different activities. Business expansion emerged as another theme, emphasizing the importance of growing the business.

Regarding the flexibility of loan conditions, one theme concerned the timing of repayment, including both late repayment and early repayment. Another theme was the overly strict enforcement of rules governing microloan repayment.

One of the main themes of the policy and attitude of the MFIs/banks was the role of trust between the MFIs /banks and the entrepreneurs. One example was the confidence of MFIs/banks that repayment delays would be resolved in the near future. Closer monitoring of repayment could contribute to building this trust.

The participants also concluded that the implementation themes are strongly interconnected. Two important combinations were identified. The first is the combination of cash flow capabilities and business planning capabilities: future diversification and business expansion can benefit from deeper insights into the business’s cashflow position. The second is the combination of flexible loan conditions and trust: more trust in entrepreneurs may lead MFIs/banks to be more accepting of behavior that deviates from contractual agreements. The two combinations are also connected. For example, repayment schedules could be better more adapted to the entrepreneur’s cashflow situation.

This was the fourth workshop on qualitative research into the determinants of successful microloan repayment. In addition to the previous in Zambia, two workshops were held in Tanzania. all in 2022. The 2026 workshop was the first to focus specifically on translating the identified four determinants into further practical implementation.

The workshop was complemented by a workshop on the development of an academic paper and the ethical use of Artificial Intelligence (AI).

For more information about organizing a comparable workshop at your university: please contact Prof. Enno Masurel at e.masurel@vu.nl. The VU Center for Entrepreneurship has an established reputation for its work in entrepreneurship and small business development in Sub-Saharan Africa.
This report was prepared by Prof. Enno Masurel who bears full responsibility for its content.

The full report is available upon request at e.masurel@vu.nl.