Determinants of survival and growth of small and medium enterprises in rural KwaZulu – Natal
It has been noticed that many countries around the world have started making the construction and development of industrial SMEs one of the critical driving forces for economic growth of their countries. The SMEs industry has shown growth and good performance in East and Southeast Asia (South Korea, Singapore, and Taiwan). Many researchers have undertaken research on small and medium enterprises (SMEs) in South Africa, including the development of rural entrepreneurship. Despite numerous articles and numerous past research surveys conducted on SMEs in South Africa, Brazil, Nigeria, Ukraine, Tanzania, Botswana, China, Taiwan, UK, Australia, USA including many other developing countries, the understanding of the determinants of survival and growth of rural SMEs in rural areas, with specific reference to KwaZulu-Natal (KZN) and the existence of a growth model remain largely unknown. Since rural businesses operate in different environments from those in urban areas, it is essential to have a broad understanding and knowledge of business characteristics of small and medium enterprises of rural entrepreneurs, including their personal attitudes, rural entrepreneurial orientation growth of business, external/internal environmental dynamics, as well as rural entrepreneurial resources. In recent times, rural entrepreneurship has had a huge impact on many issues, including economic development, employment, food supply and social safety. With more and more people moving from the rural areas to urban areas due to a lack of employment opportunities and the complexity of running their own business, the problem of potential social unrest and many other problems become more and more real. Thus, it is very important that researchers, especially in those countries with large numbers of people living in the rural areas to investigate this problem and provide ways of how to solve it. The assumptions and the confusion, surrounding rural SMEs owners/managers awareness, perceptions and the understanding of various determinants of survival and growth of rural SMEs in their areas, highlights a need and creates interest for academics to conduct more research in this particular area. There are a number of other important reasons, such as the failure rate of SMEs that also need to be investigated. This study was conducted within the rural areas of the southern region of KZN province, using quantitative research methods. The sample for the study consisted of 150 owners/managers of SMEs. The respondents were selected using quota sampling and required to complete a research questionnaire, with an interviewer present to assist. The research instrument consisted of a close–ended, questionnaire made up of a 5 point Likert scale with the questionnaires distributed to five selected areas in the rural southern region of KZN province. The research findings indicate that the size of the local market is very small for selling SMEs products; poor infrastructure has an impact on their business growth and lack of financial support as well as tough government regulations adversely affect SME growth. This study provides both theoretical and practical implications for rural entrepreneurs and policy-makers. The study presents a number of recommendations, including a conceptual growth model for rural SMEs.