A Study of the Factors Affecting the Growth of Lease Finance in Zambia

The study was aimed at assessing factors affecting the growth of lease finance in Zambia. The study focused on commercial banks that provide lease financing in Zambia, amongst the commercial banks currently operating in Zambia. The targeted respondents were staff working in the commercial banks providing lease finance. The following were the research objectives that guided the undertaking of the study: to evaluate the effect of income levels on the growth of lease finance in Zambia; to ascertain the effect of institutional factors on the growth of lease finance in Zambia; and to determine the effect of cultural factors on the growth of lease finance in Zambia. The study adopted a quantitative correlational research design. Non-probability sampling design was used in this study, with respondents selected through purposive sampling due to the inclusion criteria stated under the target population characteristics. The primary data was collected by means of a semi-structured questionnaire which were distributed to respondents from 12 commercial banks. Spearman’s Correlation analysis was adopted for purposes of the research which is a quantitative methodology employed to assess the magnitude and direction of the association between two or more variables. The study has revealed that cultural factors have the most significant effect on the growth of lease finance in Zambia based on the Spearman’s correlation results. Additionally, institutional factors had the second most significant effect as could be seen from the positive relationship between institutional factors and growth of lease finance in Zambia, whereas income levels positively affected the supply of lease finance by commercial banks, but this effect was the lowest amongst the three independent variables. With respect to the current status of the growth of lease finance in Zambia, the findings revealed that most commercial banks in Zambia have lease finance options readily available for retail and corporate customers. Recommendations and areas for further research were made based on the findings.