Business characteristics of small and medium enterprises in rural areas: a case study on southern region of KwaZulu-Natal province of South Africa

This paper reports on the small and medium enterprises (SMEs) business characteristics in rural places of Southern KwaZulu-Natal (KZN) province. It was intended to identify and discuss the various characteristics and the implications they have on the survival and growth of rural enterprises. The study was conducted in five areas (uMuziwabantu, Ubuhlebezwe, Sisonke, Zingolweni and uMzimkhulu) Southern Region of KZN province. The sample consisted of 127 SMEs owners/managers operating in the selected areas using a quota sampling method, with respondents completing a five-point Likert scale questionnaire with the assistance of an interviewer. The findings indicated that most employees within the business are unskilled; the business operations are run by using modern facilities; most of business investment strategies are hindered by a lack of finance; and the local market is very small in selling rural SMEs’ products. SPSS (23.0) version was used for data analysis. The findings presented in the figures and tables. Statistical analysis revealed that business characteristics of SMEs in rural were tested and found to be significant (P = .000*).
The paper will be useful tool for the policy-makers, business financial support institutions, and business stakeholders, government policy agencies in underlining a new way to consider future growth of SMEs in rural places, to understand challenges properly and to adjust growth strategies for the remote and under-developed areas. Most work has been focusing on SMEs in the urban and metropolitans areas with less emphasis on the rural SMEs with specific reference to KZN. The findings are limited by the quantitative nature, small sample and exploratory study. Therefore, generalization of these results should be done with care and more research with larger samples extended to other provinces is highly recommended