Determining the risk & effect of selected social capital elements on rural entrepreneurship: Empirical study of two rural district municipalities

Abstract

The study seeks to determine the risk and effect of selected social capital elements on rural entrepreneurship. Within a job-scare socio-economic climate, entrepreneurship is the vital tool to create job opportunities to reduce the growing unemployment. These are the dilemma South Africa like the rest of the developing countries continue to experience as the socio-economic problems escalates in communities. In spite of government interventions, entrepreneurship continue to be challenged by various factors including risk taking. Generally, risk-taking features in every activities that is geared towards entrepreneurial activities and rural small businesses in search of opportunities. The search for opportunities is known to be the core of entrepreneurial activities. As such, it is certain that Rural Owner-Managers (ROMs) would continue their quest in search of business opportunities to enhance the prospects of entrepreneurial activities. Given the nature of rural climate, the search for business opportunities is proven to be difficult in the environment high risk is prevalent. Due to this and other challenges ROMs at various levels of entrepreneurial activities are unable to meet the set objectives of creating employment and poverty reduction. A quantitative approach was followed aided by a self-administered 7 Likert-scale questionnaire designed to collect dataset from ROMs of small businesses. Drawing from the snowball and convenience sampling techniques, an initial population of 300 ROMs were selected. However, only 282 questionnaires were return. Descriptive statistics, frequencies, T-test and Pearson correlation were applied to analyse the data. Research evidence indicates that risk is another hampering elements which highly affect rural entrepreneurship in various forms. Further outcomes revealed that some SCEs have significant effect on rural entrepreneurship. The study recommends general refurbishment of selected SCEs through appropriate educational programmes, government assistance, and rural infrastructure initiatives such as efficient system of transportation and communication systems to enhance rural entrepreneurship.