Factors affecting the start-up and growth of Basotho-Owned MSMEs in selected districts of Lesotho

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dc.contributor.advisorCoetzee, J.en_ZA
dc.contributor.authorRamonyatsi, Tebohoen_ZA
dc.date.accessioned2023-09-29T12:08:59Z
dc.date.available2023-09-29T12:08:59Z
dc.date.issued2020en_ZA
dc.descriptionDissertation (MBA (Business Administration))--University of the Free State, 2020en_ZA
dc.description.abstractstudy was carried out to observe issues encountered by Basotho-owned MSMEs in their quest to start and grow their businesses and to highlight the successful business strategies adopted by foreign MSME owners who outperform their local counterparts. In trying to achieve the objectives of this study, a questionnaire method for data collection was utilised with closed-ended questionnaires distributed to 142 Basotho-owned MSMEs operating in the Maseru district of Lesotho, chosen through a stratified sampling technique. Out of 142 questionnaires distributed, 131 were returned, representing a 92% response rate. In order to get a holistic view of the respondents’ perspectives and their level of agreement with specific questions, five-point Likert Scale questionnaires with options ranging from “strongly agree” to “strongly disagree” were utilised. Based on the responses received through these set of questionnaires, the following findings were made: Many Basotho-owned MSMEs are survivalists and as a result their growth and expansion potential is limited. This is highlighted by the fact that 85% of the MSMEs that participated in this study employed fewer than 20 employees, with just 15% employing more than 20 people in their workforce. A big chunk of MSMEs were retailers (68%), followed by those in the services (26%) sector, wholesalers (4%) and manufacturing (2%). Furthermore, the majority of the MSMEs were owned by men, with participation by women mostly hampered by social and economic constraints. Only 17% of the respondents (MSME owners) were between the ages of 21-30, with the majority (45%) of the owners in the 31-40 age group. This indicates that there is an enormous gap in opportunities for the younger population to venture into entrepreneurship. Almost 50% of the MSMEs had been in operation for less than 5 years, while 31% had been in operation for between 6-10 years, and the rest had been in business for over 10 years. In terms of the legal status of the MSMEs, 57% were sole proprietors, while 27% were companies, followed by partnerships with 14%, and close corporations (2%) completed the total. The most common challenges faced by Basotho-owned MSMEs at start-up were a lack of access to finance, lack of business experience, high security costs to prevent crime eroding funds, and insufficient business networks. Furthermore, crime, a lack of managerial skills, lack of business training, lack of government support and difficulties in obtaining business licences were cited as additional challenges facing Basotho-owned MSMEs at start-up. Challenges encountered during the growth phase were a lack of access to expansion capital due to absence of security and high interest rate charges, increased competition from both locally and foreign-owned businesses, high taxes and sophisticated custom and trade regulations. One of the main successful business strategies used by foreign-owned MSME owners was their ability to sell products to consumers at a lower price due to them purchasing stock in bulk from suppliers, resulting in them obtaining significant trade discounts which they are then able to transfer to consumers. Other strategies they adopt include their ability to use technology and the formation of strong business relationships with their suppliers. After observing the above findings, the study concludes by offering recommendations to owners of MSMEs, the Government of Lesotho, banks and other financial institutions in order to grow and sustain Basotho-owned MSMEs and have an effective influence on the Lesotho economy.en_ZA
dc.identifier.urihttp://hdl.handle.net/11660/12268
dc.language.isoenen_ZA
dc.publisherUniversity of the Free Stateen_ZA
dc.rights.holderUniversity of the Free Stateen_ZA
dc.titleFactors affecting the start-up and growth of Basotho-Owned MSMEs in selected districts of Lesothoen_ZA
dc.typeDissertationen_ZA
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