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- Following the unprecedented increase in the self-employment rates in South Africa, the study probes the determinants of self-employment relative to being a wage earner within the context of black owned businesses in Ladysmith, KZN. A questionnaire was administered to 450 respondents comprising 299 gainfully employed and 151 self- employed blacks, using a combination of convenience and snowball sampling for the self- employed and random methods to identify wage/salary earners. The study employed a logistic regression model to estimate the probability of being self-employed relative to being a wage/salary earner focusing on household income per capita, education, age, marital status, family business background, risk propensity, gender and access to finance as independent variables, gathered from the questionnaire, to shed new light on self- employment determinants. The study used the Hosmer-Lemeshow test to assess goodness of fit and the Wald test to assess the contribution of individual predictors in the model. Supported by descriptive statistics and chi squared test, the logistic results showed a positive and meaningful relationship between self-employment and age suggesting that as one becomes older each year increases the probability of being self-employed by 3.27%. With regards to gender, the results showed a positive relationship suggesting that being female increases the possibility of being self-employed by 57.35%. On the other hand, marital status results suggested that being single decreases the chances of being self-employed by 55.56% indicating that single people are more likely to be gainfully employed. Furthermore results revealed that an additional year of education increases the possibility of being of self-employed by 13.07%. When a person has a family business background, the possibility of that person being self-employed is higher by 146%, and lastly, increased funding opportunities cause an increase in self-employment by 397%.
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- Information asymmetry is regarded as factors that affect SMMEs and issues hindering SMMEs growth which include management skills, market access and lack of training. This is supported by Rogerson (2008) that several challenges facing SMMEs development in South Africa have been unapproachable. Number of factors have been identified which relate to markets access and marketing, business management skills, training, finance and inadequate institutional support. The SMME sector is regarded as a potential employment creator and contributes significantly to the economic growth of South Africa. SMMEs have the major share of the development and almost half of the total employment in the economy. While argument still exists about the comparative contribution of SMMEs to the economy, this sector contributes a massive share of employment which contributes significantly in the economy. However, SMMEs are facing challenges that prevent them from growing, and causing a large percentage of SMMEs to shut down in their first two years of operation. This study aims to discover the information asymmetry and obstacles on SMMEs growth in uThungulu district municipality. An investigation was conducted among owners in all local SMMEs in the district to identify obstacles perceived as central to SMMEs growth. Structured questionnaires were used to collect data. The research findings indicate that lack of training and management skills are one of the challenges faced by SMMEs since the majority of entrepreneurs have only matric qualifications. The use of technology was also identified as an obstacle on SMMEs growth.
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