Published Paper Details:

Informal money-saving schemes, commonly known as "Chilimba" in Zambia, are community-based financial practices where members pool their savings to achieve individual and collective financial goals. These savings groups, which operate outside formal financial institutions, have become an essential financial tool for small-scale traders who face significant challenges in accessing credit. Despite the widespread use of Chilimba, there has been limited research on its impact on business performance indicators such as revenue generation, sales growth, and profitability. The study sought to assess whether participation in these informal savings schemes contributed to business growth, particularly in urban markets. Using a mixed-method approach, data were collected from 104 business owners across Lusaka's CBD, Matero, and Garden Chilulu through structured questionnaires and in-depth interviews. The data analysis employed inferential statistical methods, including regression and correlation analysis, using EViews software to determine the relationship between Chilimba participation and business performance. The findings revealed that participation in Chilimba had a significant positive effect on business growth, with traders reporting increased revenue, higher profit margins, and improved sales turnover. The study also indicated a strong cointegration between Chilimba contributions and financial performance, suggesting that regular participation in these savings groups enabled traders to expand their businesses, manage cash flow effectively, and invest in stock. Additionally, demographic analysis showed that women accounted for 68% of Chilimba participants, with the majority aged between 36 and 45 years, highlighting the scheme's role in enhancing financial inclusion for women entrepreneurs. The study further found that while Chilimba provided significant financial benefits, it was not without risks, including high default rates, lack of formal documentation, and the potential loss of savings due to inflation/economic instability. These challenges raised concerns about the sustainability of informal savings groups, particularly in the absence of regulatory frameworks to protect members' contributions. Despite these risks, Chilimba remained an effective financial alternative, enabling small-scale traders to secure capital, improve business stability, and strengthen social networks within their communities. The study underscored the socioeconomic importance of Chilimba, revealing that many participants used their earnings to support household expenses, education, and healthcare, thereby improving overall livelihood outcomes. The findings emphasized the need for strategic interventions to enhance the efficiency and security of informal savings schemes, including financial literacy programs, improved record-keeping mechanisms, and policy frameworks to integrate these schemes into the broader financial system. The study concluded that Chilimba serves as a financial enabler for small businesses, promoting economic resilience, financial inclusion, and community empowerment in urban markets. The research contributed valuable insights to the discourse on informal finance, small business sustainability, and financial inclusion in Zambia, highlighting the potential of community-driven savings mechanisms in fostering business growth and economic development. These findings provide important implications for policymakers, financial institutions, and development organizations, stressing the necessity of supporting and formalizing informal savings groups to enhance their long-term impact on small enterprises. The study recommended that future research should explore hybrid financial models that integrate informal savings with formal banking services to maximize financial security and sustainability for small-scale traders.