Challenges faced by small businesses in registering companies in rural Kwazulu–Natal

Abstract

The research investigated challenges faced by small businesses in registering companies in rural KwaZulu-Natal province of South Africa. uMzinyathi District Municipality in KwaZulu-Natal was used as a case study, representing the rural context of the province investigated. A sample of ten small businesses within the uMzinyathi Small Business Forum which represents all local municipalities of the district, together with stakeholders such as the Small Enterprise Development Agency (SEDA), the Department of Economic Development, Tourism and Environmental Affairs (EDTEA), the Small Business Unit staff members and a consultant who deals with the registration of companies were selected, using purposive sampling to collect data. The key findings of the study indicated that small businesses in rural areas are affected by many challenges which differ from their urban counterparts. These include socio-economic conditions, lack of small business support institutions and local government related challenges as a result of their being in rural areas. The research findings were critical for establishing effective service delivery interventions that could improve small business development and enhance the participation of small businesses in local initiatives within rural areas.