Factors affecting performance/success of small-scale rural non-farm enterprises in Lesotho

Abstract

Purpose This paper aims to study the different factors that determine the performance or success of small-scale, non-farm enterprises in Lesotho. Evidence shows that small-scale enterprises in developing countries are confronted with different challenges and problems that make them less viable. As a result, the capacity of small-scale, non-farm enterprises in employment creation, income generation and providing the means of livelihood to the poor people is not significant. In Lesotho, many people who are retrenched from the South African mines are absorbed in small-scale, non-farm enterprises to make a living. However, small-scale enterprises are faced with different challenges. The research findings suggest that factors leading to success/performance of rural non-farm enterprises in Lesotho include gender of the entrepreneur, age of the entrepreneur, ability of the entrepreneur to establish wider social networks, large population/market, availability of communication networks and infrastructure, participation of enterprises in the international market and costs of doing business and competition. In this regard, the paper makes policy recommendations that can be used to improve performance/success of small-scale, non-farm enterprises. Design/methodology/approach This research uses both qualitative and quantitative research methods to analyse data. Findings The main finding of the research is that foreign competition hinders the success of non-farm enterprises in Lesotho. The research findings further reveal that enterprises owned by women make the highest turnover compared to those owned by men. Practical implications This study brings in different factors that can ensure or hinder success/performance of small-scale, rural non-enterprises. Originality/value The research paper is of value in that it is the first study in Lesotho that considers different factors that determine business success in relation to employment creation, turnover and profitability.