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The effects of entrepreneurial quality on the success of small, medium and micro agri-businesses in KwaZulu-Natal, South Africa

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

Abstract

This paper estimates a logit model of the effects of entrepreneurial quality on business success in a stratified random sample of 44 small, medium and micro enterprise (SMME) agribusiness owners financed by Ithala Development Finance Corporation, using loan repayment as a proxy for success. These owners were surveyed during October 2003-February 2004 and asked to score four components of entrepreneurial quality identified by Guzman and Santos (2001): preference for working as self-employed, motivation type, energizer behaviours, and personal and external factors. The results show that strong energizer behaviours (such as current and planned business expansion and staff training), more business experience, and family assistance to become an entrepreneur, promote loan repayment, while lack of access to electricity (proxy for lack of access to services) negatively affects loan repayment. Policymakers and public and private financial institutions could give more attention to these factors when implementing policies to promote access to finance by, and the growth of, agribusiness SMMEs.

Suggested Citation

  • Darroch, Mark A.G. & Clover, T.A., 2005. "The effects of entrepreneurial quality on the success of small, medium and micro agri-businesses in KwaZulu-Natal, South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(3), September.
  • Handle: RePEc:ags:agreko:31723
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    References listed on IDEAS

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    1. 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 & Francis Journals, vol. 20(1), pages 129-142.
    2. Herron, Lanny & Robinson, Richard Jr., 1993. "A structural model of the effects of entrepreneurial characteristics on venture performance," Journal of Business Venturing, Elsevier, vol. 8(3), pages 281-294, May.
    3. Mashatola, M.C. & Darroch, Mark A.G., 2003. "Factors affecting the loan status of sugarcane farmers using a graduated mortgage loan repayment scheme in KwaZulu-Natal," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 42(4), December.
    4. Rogerson, C.M., 1999. "THE SUPPORT NEEDS OF RURAL SMMEs: THE CASE OF PHUTHADITJHABA, FREE STATE PROVINCE," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 38(2), June.
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    Keywords

    Agribusiness;

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