Development support for small and medium enterprises in the fi nancially constrained north-eastern regions of Namibia

Abstract

SMEs in Namibia suffer from a high failure rate as the rate of business discontinuation is four times higher than the rate of established business activity, as defi ned by the Global Entrepreneurship Monitor. The purpose of this paper is to identify the type of support that is necessary to develop the small and medium enterprises (SMEs) in the poorest areas in Namibia and to determine if a signifi cant difference exists in terms of level of support required by SMEs between the two major towns in the north-eastern region of Namibia, Katima Mulilo (in Zambezi) and Rundu (in Kavango East) and between owners and managers. No databases of businesses existed in these two towns. Subsequently, a census of all the businesses (972) was conducted, from which a random sample of 176 businesses was drawn. The Mann Whitney, Goodman and Kruskal’s tau and Kendall’s tau-b tests were used to test for differences in type of support needed between the two towns. Overall the most ‘necessary’ types of support are provision of skills/vocational training, access to market information, a common facility centre, technical advice and assistance with the business plan development (mainly to obtain loans). Significant differences were found between the two towns with regard to type of support needed. In Katima Mulilo, ‘skills/vocational training’ ‘mentoring’ and ‘advice on the organisation of the business’ are the most essential types of support needed, while in Rundu it is ‘market information’, ‘technical advice’ and ‘subcontracting’. This is the fi rst paper which explores development support for SMEs in the remote regions of Namibia.

Key words: small and medium enterprises (SMEs), Namibia, Zambezi and Kavango west and Kavango east regions, Type of support needed, owners versus managers, age of business, training