SMME EFFICACY: AN IN-DEPTH ANALYSIS OF KEY CONSTRUCTS IN RURAL CONTEXT

Abstract

This paper investigates constructs fundamental to enterprise efficacy in Limpopo Province. Following the purposive sampling technique, 724 entrepreneurs operating Small, Micro, and Medium-scale enterprises (SMMEs) in selected rural areas of the province were sampled. Data collection was performed one-on-one using a structured questionnaire whose constructs were derived from an existing entrepreneurship prototype in Vhembe District. The analysis modelled on Multilayer Perceptron through IBM SPSS v27 suggests endogenous entrepreneurial capacity building in bridging networks, resilience, risk awareness, self-efficacy, and nonconformist factors. These were perceived as being lacking amongst the entrepreneurs and critical to enterprise efficacy in the area. Although exogenous construct tends to be less critical compared to endogenous, it poses a challenge to local enterprises. The factors include access to the market, enterprise financing, stiff competition, operational costs, lack of physical capacity, and sociocultural issues. Local infrastructure concerns and entrepreneurial capacity building need solutions at a local level to facilitate targeted support on the two identified constructs affecting SMMEs’ efficacy in rural areas. The study's emphasis on local-level solutions for addressing infrastructure concerns and enhancing entrepreneurial capacity building adds practical value. By highlighting the need for targeted support at the local level, it provides actionable insights for policymakers, local authorities, and organizations aiming to foster SMME efficacy in rural areas.