The Effect of Early Partial Pension Withdrawals on the Performance of Microfinance Zambia Limited

Micro financial institutions are vital in providing consumer credit mainly to those in formal employment in Zambia. In April 2023, the public pensions law was amended permitting early partial access to pension. This study investigates the effect of the amended law on the performance of Micro Finance Zambia Limited, by examining four key performance indicators: loans applications, disbursements, repayments, and interest rates.
Primary and secondary data sets for the period 2020 to 2023, were collected from the Micro Finance Zambia Limited and the Bank of Zambia official website, respectively. The study applied the qualitative research method approach. The purposive sampling method was employed in selecting the thirty participants. The mixed methods technique was applied in data collection, with the questionnaire and internet as data collection tools. The Dummy Variable Regression Model and Tabulation data analysis method were employed in analysing the data.
The findings show that post April 2023, a reduction was experienced in loans applications, interest rates, disbursements, while repayments increased. The findings reveal that the change in policy affected the performance of Micro Finance Zambia Limited. The weakness and limitations of this study arose from very small data set. Future studies covering longer periods are recommended. The small data set and the short study period from this novel study may pause for its findings to be generalised. Further research in this area is required.

Partial pension withdrawal; Micro-financial institutions; Debt settlement; Salaries-backed loans; Loan interest; Financial performance; Key performance indicators; Loans disbursements

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