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Owners' perceptions of factors that constrain the survival and growth of small, medium and micro agribusinesses in KwaZulu-Natal, South Africa

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  • Clover, T.A.
  • Darroch, Mark A.G.
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    Abstract

    Public and private sector institutions in KwaZulu-Natal (KZN), South Africa (SA) can identify policies and strategies to increase the survival and growth rates of small, medium and micro-enterprise (SMME) agribusinesses if they have more information about the factors that constrain business performance. The sustained growth of these SMMEs could, in turn, help to reduce poverty, income inequality and unemployment problems in the province. The owners of 44 agribusiness SMMEs in a stratified random sample of Ithala Development Finance Corporation clients in KZN were, therefore, surveyed during October 2003 and January 2004 to identify what factors they perceive constrain business survival and growth. The respondents identified eight dimensions of constraints, namely: a lack of access to services; funding constraints at start-up; lack of management capacity in the enterprise; access to tender contracts; compliance costs associated with VAT and labour legislation; liquidity stress; lack of collateral; and lack of institutional support. The provision of appropriate infrastructure and training, development of innovative loan products, and policies to reduce the cost of compliance with legislation affecting agribusiness SMMEs are some possible solutions to help deal with these constraints.

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    File URL: http://purl.umn.edu/31694
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    Bibliographic Info

    Article provided by Agricultural Economics Association of South Africa (AEASA) in its journal Agrekon.

    Volume (Year): 44 (2005)
    Issue (Month): 2 (June)
    Pages:

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    Handle: RePEc:ags:agreko:31694

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    Web page: http://www.aeasa.org.za/
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    Keywords: Agribusiness;

    References

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    1. Louise Fenwick & Mike Lyne, 1999. "The relative importance of liquidity and other constraints inhibiting the growth of small-scale farming in KwaZulu-Natal," Development Southern Africa, Taylor and Francis Journals, vol. 16(1), pages 141-155.
    2. Cecile Nieuwenhuizen & Jaap Kroon, 2003. "The relationship between financing criteria and the success factors of entrepreneurs in small and medium enterprises," Development Southern Africa, Taylor and Francis Journals, vol. 20(1), pages 129-142.
    3. Adrian Wynne & Michael Lyne, 2003. "An empirical analysis of factors affecting the growth of small-scale poultry enterprises in KwaZulu-Natal," Development Southern Africa, Taylor and Francis Journals, vol. 20(5), pages 563-578.
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    Cited by:
    1. Darroch, Mark A.G., 2010. "South African Farmers’ Perceptions of the Benefits and Costs of Complying with EUREPGAP to Export Fresh Citrus to the European Union (EU)," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96437, African Association of Agricultural Economists (AAAE) & Agricultural Economics Association of South Africa (AEASA).

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