By: Noxolo Majavu
The primary barriers that hinder the growth of women-owned SMEs in rural KwaZulu-Natal communities are a lack of infrastructure, a lack of knowledge, and financial restraints. According to a recent study by Kansilembo Freddy Aliamutu and Msizi Vitalis Mkhize from the University of KwaZulu-Natal, published in the Indonesian Journal of Applied Sciences, 57.6% of respondents cited a lack of funding as a significant obstacle to women’s entrepreneurship in rural South Africa.
A total of 48.4% identified a lack of expertise as a key barrier for small businesses. This underscores the importance of education in equipping entrepreneurs with the necessary skills to manage their businesses effectively. The researchers surveyed 250 women business owners in the rural regions of Umzinyakude, Uthukela, and Ugu. Of the respondents, 144 strongly agree that inaccessibility to funding hampers growth, with five strongly disagreeing. Factors contributing to this funding blockage include discriminatory financing practices, an absence of collateral, and a history of poor credit.
This forces many female entrepreneurs to rely on informal financial sources, such as relatives and friends, limiting their business expansion opportunities. Moreover, inadequate infrastructural facilities, such as poorly maintained restrooms, were highlighted as influencing the growth of women-owned businesses. The lack of basic infrastructure in many rural communities, including secure roads, reliable electricity, and cellular network coverage, also poses challenges to efficiently operating businesses.
The lack of infrastructure results in higher transportation costs, limited market access, and decreased production capacity. The study emphasises the critical role of addressing these obstacles to foster the development of women-owned companies in South African rural communities. It says effective policies and programmes must be implemented by the government and key stakeholders to support rural entrepreneurship and address these challenges effectively.
“The findings also demonstrate how critical obstacles to finances, a lack of education, and inadequate facilities are to developing women-owned companies in South African rural communities. To encourage rural women’s entrepreneurship, the government as well as important stakeholders have to prioritise these obstacles. It is possible to do this by enacting effective policies and programs,” it reads.
The study suggests that the government expand the availability of capital for rural women-owned businesses via microfinance organisations, government loan and grant programmes, and collaborations with financial companies. “… financial awareness programmes and providing fundamental financial administration and accounting education to rural women entrepreneurs [must be created to support women-owned businesses],” the researchers further suggest.
