The Role of Financial Management Practices in Promoting Rapid Growth of MSMEs in Lusaka Central Business District

The main aim of this study was to examine the role financial management practices play in promoting the rapid growth of micro, small, and medium enterprises (MSMEs) in Lusaka’s central business District (CBD), specifically those operating in the retail sector. Its aims were to identify the type of financial management practices utilized by MSMEs, assess whether these practices contribute to their growth, and examine the challenges they face when implementing financial management practices (FMPs). A mixed-method case study design was adopted and data was obtained through questionnaires and interviews. A sample size of 361 businesses was derived from a population of 6000 MSMEs. Using SPSS, a single factor ANOVA test was carried out, and the results showed a P- means of 0. 417229. Which is greater than the 0.05 significance level, and observed F-statistic of 0.982723, is not even close to exceeding critical value, which above is 2.402775. Based on these results we failed to reject the null hypothesis, which proves that different financial management practices will promote MSMEs expansion. Furthermore, financial reporting and analysis emerged as one of the most frequently utilized practices. Among the financial management practices identified Risk management received less attention, indicating a significant imbalance in the adoption of financial techniques. The study concludes that sound financial management practices are critical for MSMEs growth, stability, and availability of finance. However, addressing the challenges faced by MSMEs requires targeted actions. Recommendations include encouraging MSMEs owners to adopt basic financial tools, government-led financial management training for MSMEs in Lusaka CBD, and carrying out additional research to explore the impact of formal financial practices on MSMEs performance and resilience.