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Exploring the Relationship Between Capital Structure and SME Profitability: A Case Study of Lusaka's Electronic Device Market

Author

Listed:
  • Redson Mankishi

    (Graduate School of Business, University of Zambia)

  • Austin Mwange

    (Graduate School of Business, University of Zambia)

  • Windu Matoka

    (School of Business, ZCAS University, Zambia)

Abstract

The capital structure decisions made by Small and Medium Enterprises within the electronic device market in Lusaka, Zambia, significantly impact their financial health and long-term sustainability. This study examines how financing through debt and equity affects SME profitability using a descriptive research design and panel data analysis. The findings indicate that although financial risk, market conditions, and access to finance influence profitability, their effects are not statistically significant, while improved financing access and favorable market conditions are associated with higher growth prospects.

Suggested Citation

  • Redson Mankishi & Austin Mwange & Windu Matoka, 2025. "Exploring the Relationship Between Capital Structure and SME Profitability: A Case Study of Lusaka's Electronic Device Market," East African Finance Journal, East African Finance Journal, vol. 4(1).
    • Handle: RePEc:cwk:eafjke:2025-01
    DOI: 10.59413/eafj/v4.i1.1
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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