Stephan, South Africa (1)

8/3/2019 Stephan, South Africa (1)

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AN EMPIRICAL INVESTIGATION OF WOMEN

ENTREPRENEURSHIP IN LESOTHO

Stphan P van der Merwe* & Mampoi Lebakeng

Potchefstroom Business School, North-West UniversityPrivate Bag X6001, Potchefstroom 2520, Republic of South Africa

Tel: +27-18-2991414; Fax: +27-18-2991416

[email protected]


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* To whom correspondence should be addressed.

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AN EMPIRICAL INVESTIGATION OF WOMEN

ENTREPRENEURSHIP IN LESOTHO

ABSTRACT

The important role that entrepreneurship plays to combat unemployment, wealth creation and

the alleviation of poverty should not be underestimated, especially in regions with growing

unemployment rates. Women entrepreneurs can contribute significantly to economic

development in Africa, but their contribution has not been adequately studied and developed.

Although it is challenging for both men and women to start and sustain a successful business,

women face unique challenges to self-employment. The objective of this study was toinvestigate women entrepreneurship in Lesotho and to make practical recommendations to

enhance women entrepreneurship in the country. A survey that included 54 women-owned

businesses was conducted. Women entrepreneurs in this study were motivated by pull factors,

such as the need for independence, self-fulfilment, work flexibility and a need for a challenge

to self-employment. Factors such as dissatisfaction with salaried jobs and insufficient family

income pushed them into self-employment. They are currently facing obstacles, such as

obtaining finances, work-home conflict, lack of education and training in business and

management skills. They, furthermore, indicated financial support, business training and

advice, the need to network with other business owners and marketing support as their main

support needs. Practical recommendations are suggested to Government and women

entrepreneurs to overcome these obstacles and to ensure that women entrepreneurs can

sufficiently contribute to the economy and empower themselves economically.

Keywords: women entrepreneurship, small and medium-sized businesses, motivational

factors, obstacles, self-employment

INTRODUCTION

The important role that small businesses and entrepreneurship play in stimulating economic

activity, creating jobs, alleviating poverty and uplifting living standards, has been recognised

internationally as well as in Africa (Van Vuuren & Groenewald, 2007:269).

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Southern Africa is a developing region with high unemployment rates, low levels of formal

and higher education, the migration of individuals from rural areas to cities, corporate

restructuring and government policies, and regulations that enforce the restructuring of larger

organisations. The region thus has an urgent need for entrepreneurs in the small, micro- and

medium enterprises (SMMEs) who can act as a tool to combat unemployment and crime and

to stimulate the economy as a whole (Maas & Herrington, 2006:59).

The last half-century has witnessed monumental changes for women as income earners

(Smith-Hunter, 2006:1). Smith-Hunter (2006:1) cited Bragger (1996) and Buttner and Moore

(1997) who emphasise that these changes included an influx of women into the main stream

labour market; the revolution of the womens movement and the civil rights movement, which

propelled women into non-traditional roles; and the explosion in the number of women

entrepreneurs particularly over the last two decades. This latter phenomenon has given rise to

countless books, articles and reports informing the public as to the various aspects of the

seemingly never-ending kaleidoscope of women as entrepreneurs.

According to Maas and Herrington (2006:38), the growth in trial number female

entrepreneurs outnumber male entrepreneurs. This led to the renewed focus on gender

entrepreneurship and the development of appropriate entrepreneurship interventions for

gender-specific groups internationally. In Chile, a developing country, the estimation is that

there are 513 000 women entrepreneurs, which is 33% of all entrepreneurs and has increased

from 20% three years ago. The estimate is that by 2010 female entrepreneurs in Chile will

equal the male entrepreneurs and create more than 50% of the jobs in new enterprises.

Similarly, Maas and Herrington (2006:30) indicate that according to the International Trade

Centre (2004), Canada has experienced a 200% growth in the number of women

entrepreneurs over the last 20 years. Within the African context, taking Cameroon as an

example, women entrepreneurs manage 57% of small and micro-businesses, while in Uganda

women entrepreneurs form the majority of the countrys business people in the areas of

farming and small to medium-sized enterprises.

However, Dowing and Daniels (1992:1) explored female entrepreneurs growth patterns using

census survey data collected in Lesotho, Swaziland, South Africa and Zimbabwe. These

surveys indicate that employment growth rates of womens enterprises are significantly lower

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than men. In Lesotho, 17% of small and medium-sized entrepreneurs in the manufacturing

sector are women (Lesotho Ministry of Trade, Commerce and Industry, Licence Register

2007/2008 financial year). It is thus clear that Lesotho underperformed with regard the role

that women entrepreneurs play in the economy in relation to many other countries.

The Lesotho Review (2003:29) indicated that the Basotho Enterprises Development

Corporation (BEDCO) is now gearing itself towards the management of the home-grown

entrepreneur credit scheme that will prove sustainable for the benefit of Basotho

entrepreneurs. This is a positive step to stimulate entrepreneurship in Lesotho.

The challenges that women entrepreneurs face in Lesotho have not been adequately studied

and developed. The focus of this study was micro-, very small, small and medium-sized

women-owned businesses.

PROBLEM STATEMENT

Countries around the world are increasingly formulating policies to make it easier to start a

business. These changes could benefit women entrepreneurs significantly. McConnell

(2007:2), in the Doing Business Report, indicated that countries that ranked highest on its

ease of doing business scale, are associated with higher percentages of woman entrepreneurs

and employees in comparison with their male counterparts. McConnell (2007:2), furthermore,

is of the opinion that women have enormous potential to bring prosperity in the world and

therefore encouraging women entrepreneurship is very important.

In this study, it is thus imperative to explore why there are still a relatively small number of

women entrepreneurs in comparison with their male counterparts in Lesotho and to determine

whether the country is aligned with global initiatives to promote women entrepreneurship.

Research on women entrepreneurship remains limited within the Southern African context

and this has a direct influence on the formulation and implementation of policies and support

programmes that could be one of the main causes of the regions current poor performance

with regard to women entrepreneurship activity. It was only over the past few years that more

scientific-based research on women entrepreneurs was done in various geographic areas in

South Africa (refer to studies done by Meyer, 2009; Kock, 2008; Lebakeng, 2008; Botha,

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2006, among others). There is ample justification, against the barren background of scientific

value-added research, to pursue more earnest investigations into the unique challenges facing

women entrepreneurs in Lesotho.

OBJECTIVES OF THIS STUDY

The main objective of the study is to investigate women entrepreneurship in Lesotho and to

make practical recommendations to stimulate the growth and success of women entrepreneurs

in the country.

To achieve the main objective of the study, the following secondary objectives were

formulated:

To define women entrepreneurship within the Lesotho context.

To obtain insight into the dynamics of women entrepreneurship by means of a

literature review.

To empirically investigate women entrepreneurship in Lesotho based on a

structured questionnaire.

To determine what motivates women in Lesotho to start their own businesses.

To determine the unique challenges women face in managing their businesses.

To determine the needs of women entrepreneurs with regard to support, training

and development.

To suggest practical recommendations to enhance women entrepreneurship in

Lesotho.

LITERATURE REVIEW

For the purpose of this study, no technical distinction was made between small to medium-

sized business owners (business ownerper se) or entrepreneurs. Women entrepreneurs in this

study are thus defined as female owner-managers of small to medium-sized businesses.

Micro-, very small, small and medium-sized businesses in this study were classified as

businesses that employ less than 200 full-time equivalents of paid employees (South African

National Small Business Act, 1996; National Small Business Amendment Act, 2004:2).

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Factors that motivate women to start their businesses

As recommended by Botha (2006:293) in previous research, it is important to determine the

factors that motivate women to start their own businesses. This knowledge regarding the

profile of the woman entrepreneur might enable policy-makers to create an encouraging

environment for women entrepreneurs to start their own businesses.

Heilman and Chen (2003:360) as well as Botha (2006:122) argued that various push-and-pull

factors exist that can motivate women to start their own businesses. Maas and Herrington

(2006:19) defined push factors as the more negative factors, such as unemployment and

retrenchment, which force people to become entrepreneurial in order to survive. They regard

pull factors to be the more positive factors, such as government support and role models,

which might influence people to choose entrepreneurship as a career option. Ghosh and

Cheruvalath (2007:149) found that only one-fifth of women are drawn into entrepreneurship

by pull factors. The rest are forced into entrepreneurship by push factors.

A summary of relevant literature regarding push-and-pull motivational factors to women

entrepreneurs is presented in Table 1. Refer to detailed discussions of these factors in the

studies by Kock (2008), Lebakeng (2008) and Meyer (2009).

According to the scholars mentioned in Table 1, the following pull factors to entrepreneurship

are relevant to women entrepreneurs, i.e. the need for independence, achievement and self-

fulfilment; providing a challenge to the female entrepreneur; improving the financial position

of women entrepreneurs and their families; the desire to be their own boss and to control their

own life; it provides more flexibility for balancing work and family; they can develop and

commercialise a hobby; entrepreneurship gives them the opportunity to make a contribution

to the community and be reckoned for that; and the influence of role models such as their

parents, family, friends or leading entrepreneurs in the community can make entrepreneurship

an attractive prospect or career choice to them.

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Table 1: Push and pull motivational factors

PULL MOTIVATIONAL FACTORS

Motivational factor Relevant literature

Need for independence Hughes (2006:109); Smith-Hunter (2006:28); Greene, Hart,Gatewood, Bush and Carter (2005:71); McClelland, Swail,

Bell and Ibbotson (2005:85); Baeva (2004:2); Bradley andBoles (2003:12, 301); Jalbert (2000:16); Orhan (1999:2);

Chavan and Agrawal (1998:1); Marlow (1997:208); Hisrich

and Peters (1996:98); McKay (2001:149)

Provides a challenge (need a

challenge)

Hughes (2006:109); Buttner and Moore (1997:42)

Improved financial opportunity Hughes (2006:109); Marlow (1997:208)

Self-fulfilment Segal, Borgia and Schoenfeld (2005:3); Hughes (2006:109);

Bruni, Gherardi and Poggio (2004a:260); Jalbert (2000:16);Buttner and Moore (1997:34)

Desire to be own boss DeMartino and Barbato (2003:830); Hughes (2006:109);

Bradley and Boles (2003:12)

Flexibility for balancing family and

work

Segal et al. (2005:3); Carter, Gartner, Shaver and Gatewood,(2003:17); Hughes (2006:109); Lombard (2001:216)

Potential to develop a hobby Bradley and Boles (2003:301); Marlow (1997:208)

Social status and lack of recognition

(personal achievement, to be

reckoned in the community)

Eckel and Grossman (2002:288); Mallon and Cohen

(2001:225)

Role models and other peoples

influence (friends and family)

Anna, Chandler, Jansen and Mero (2000:392)

PUSH MOTIVATIONAL FACTORS

Dissatisfaction with salaried jobs

(job/career frustration)

Ghosh and Cheruvalath (2007:149); Segal et al. (2005:3);Bradley and Boles (2003:6); Tanguchi (2002:882); McKay

(2001:152); DeMartino and Barbato (2002:818); Catley and

Hamilton (1998:76); Marlow (1997:208); Lee-Gosselin and

Gris (1990:420)

Redundancy (lost your job,

retrenched)

Hughes (2006:109)

Lack of available work Hughes (2006:109)

Insufficient family income (need to

supplement family income)

Segal et al. (2005:3); DeMartino and Barbato (2002:816);McKay (2001:149);

Hitting the glass ceiling McClelland et al. (2005:85);Georgellis and Wall (2004:1);Hokkanen and Autio (1998:7)

Need for a flexible work schedule Ghosh and Cheruvalath (2007:149); DeMartino and Barbato

(2002:818); Lee-Gosselin and Gris (1990:420)

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Push factors, such as the dissatisfaction with salaried jobs or job/career frustration;

redundancy (or retrenchment and the lack of available work); insufficient family income and

the need to supplement their income; women hitting the glass ceiling and being frustrated by

that; and the need for a flexible work schedule to balance their work and family obligations

are highlighted by various scholars (refer to Table 1).

Obstacles to women entrepreneurship

It is, furthermore, essential to determine the factors that might inhibit entrepreneurial activity

among women, taking into consideration the large contribution women entrepreneurs can

make to the economy.

Richardson, Howarth and Finnegan (2004:82) commented that women entrepreneurs suffer

from significant material constraints through to unhelpful attitudes arising from societys

negative attitudes towards women in business. Women entrepreneurs often feel that they are

victims of discrimination. This statement was also emphasised by Orhan (1999:2), who found

that one of the most interesting issues with regard to women entrepreneurship is the different

ways women are discriminated against in concealed ways.

According to Kuratko and Welsch (1994:332), women entrepreneurs have long felt that they

have been victims of discrimination. Various studies examined the types of discrimination

and some have been attempted to document them. This argument is supported by De Bruin,

Brush and Welter (2007:325). Researchers Sexton and Bowman-Upton suggest that female

business owners are subject to gender-related discrimination. In addition, Abor and Biekpe

(2006:106) emphasise that this discrimination against women seems to be even worse in sub-

Saharan African countries, such as Ghana, where the financial sector is male oriented. The

argument is further supported by Marlow (1997:202), who commented that discrimination

remains a problem for women in self-employment, for example, they experience particular

difficulties in gaining bank finance for their ventures.

Challenges to women entrepreneurs cover a wide spectrum, including level of education,

inter-role conflicts emanating from greater parenting responsibilities, a dearth of financial

assistance and socio-cultural constraints (Ghosh & Cheruvalath, 2007:150). Although men

and women both experience personal problems, women recorded more difficulties. This is

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especially true with regard to a lack of self-confidence and not being taken seriously by

providers of funds when applying for funds (Bridge, ONeill & Cromie, 2003:255). It is

widely acknowledged that African women have access to fewer resources than men. For

example, relative to men, they tend to have lower access to land, credit facilities, education

and training facilities (Katepa-Kalala, 1999:7).

Furthermore, in many African countries, women have fewer inheritance rights either by law

or obstacles preventing women from realising their economic potential as well as constraining

economic development (Ong, 2008:1). Downing and Daniels (1992:1) argue that growth-

oriented donors have promoted investment strategies in Africa that typically exclude women,

due to the commonly held view that women enterprises are concentrated in undynamic sub-

sectors that have little potential for contributing to the growth of the economy.

Table 2 provides a summary of the relevant literature discussing the obstacles and challenges

facing women entrepreneurs (also refer to Meyer 2009; Kock, 2008; Lebakeng, 2008; Botha,

2006).

Table 2: Relevant literature on the obstacles facing women entrepreneurs

Obstacles Relevant literature

Lack of business management skills Kock (2008:103);Coleman (2007:315); Maas and Herrington(2006:41); Brindley (2005:154); McClelland et al. (2005:4);Welter (2004:214); Kantor (2001:6); Boden and Nucci

(2000:348); Catley and Hamilton (1998:77); Lee-Gosselin

and Gris (1990:427); Kuratko and Welsch (1994:333);

Katepa-Kalala (1999:7)

Lack of education and training (in

general)

Coleman (2007:315); Botha (2006:146); Maas and Herrington

(2006:41); McClelland et al. (2005:11); Kuratko and Welsch(1994:332); Birley, Moss and Saunders(1987:281)

Inter-role conflict (work/home

conflict)

Kock (2008:103); Ahl (2006:605); Bruni, Gherardi andPoggio (2004b:416); Winn (2004:148); Chell (2001:159);

Mazzarol, Volery, Doss and Thein (1999:58), Breen, Calvert

and Oliver (1995:447); Cannon (1991:334); Catley andHamilton (1998:78); Mallette and McGuinness (1998:1);

Watson (2003:263), Chell and Baines (1998:119); Kuratko

and Welsch (1994:333)

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Inequality of access to credit (difficult

to obtain financing as a woman)

Wasilczuk and Zieba (2008:160); Van Vuuren andGroenewald (2007:273); Abor and Biekpe (2006:106); De

Bruin et al . (2007:325); Revivo-Steiner (2006:20);Cavalluzzo and Wolken (2005:2155); Bruni, Gherardi and

Poggio (2004a:260); Richardson et al. (2004:52); Verheul,Van Stel and Thurik (2004:14); Welter (2004:212); Baeva

(2003:3); Bridge et al. (2003:262); Watson (2003:263);Gundry, Ben-Yoseph and Posig (2002:72); Heidrick and

Johnson (2002:2); Kantor (2001:6); ONeill and Viljoen

(2001:39); Weiler and Bernasek (2001:92); Hisrich and

Ozturk (1999:123); Breen et al. (1995:446); Cannon(1991:344) Kuratko and Welsch (1994:332); Fay and

Williams (1991:65)

Inhibiting laws and regulations (lower

access to land, contractual rights-

husbands consent or judge approval)

Ong (2008:1); Van Vuuren and Groenewald (2007:273);

Maas and Herrington (2006:41); Baeva (2004:3); Welter

(2004:214)

Family pressures (gender-role

expectations)

Winn (2004:147); Bradley and Boles (2003:22); ONeill and

Viljoen (2001:39); Jalbert (2000:30); Chell and Baines

(1998:132)

Lack of self-confidence Kock (2008:103);Greene et al. (2005:11); Bradley and Boles(2003:17); Minniti and Arenius (2003:16); Jones and Tullous

(2002:245); Mallette and McGuinness (1998:12)

Risk averse (great fear of failure) Kock (2008:103); Verwey (2006:1); Brindley (2005:153);

Orhan (1999:6); Cliff (1998:523); Mallette and McGuinness

(1998:12); Hutchenson (1995:238)

Socio-cultural environment (lack ofrespect from male community and

stereotype)

Van Vuuren and Groenewald (2007:273); Maas andHerrington (2006:41); Baeva (2004:3); Richardson et al.(2004:82); Kutani and Bayraktaroglu (2003:3); Learner,

Brush and Hisrich (1997:318)

Isolation from business network De Bruin et al. (2007:325); Manolova, Carter, Manev andGyoshev (2007:411); Welter (2004:213); Learner et al.(1997:324)

Lack of female role models Mattis (2004:154); Matthews and Moser (1995:366); Lee-

Gosselin and Gris (1990:431)

Lack of timely business information Kock (2008:103); Van Vuuren and Groenewald (2007:273);Bruni et al. (2004a:256); Welter (2004:213); Kantor (2001:6);Kouriloff (2000:65)

Pressure of childcare McClelland et al. (2005:11); Affholder and Box (2004:18);Winn (2004:147); Bradley and Boles (2003:22); ONeill and

Viljoen (2001:39); Jalbert (2000:30); Chell and Baines

(1998:132)

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Support for women entrepreneurs

Winn (2004:151) argued that the critical factors for women to succeed in independent

businesses need to be understood to provide a better education and support system.

Governments can provide female entrepreneurs with special loans, subsidies, funds, enterprise

centres, entrepreneurship awards, counselling, training, advisory support, information

products and web portals (Verheul et al., 2004:14). According to Minniti and Arenius

(2003:24) and Kock (2008:116), governments should address factors such as education,

training and family-work reconciliation. Policies should thus create and guarantee the

existence of underlying conditions favourable to an entrepreneurial environment rather than

being active promoters of start-up activities.

Abimbola, Emmanuel and Ahmadu (2007:1101), however, found that in Nigeria many

programmes and legislation have been implemented to improve life for women entrepreneurs,

but have not yielded results. This happened because most of the facilities embedded in the

programmes do not reach those in need of them, but are used to service political and other

loyalties. These researchers believe that the dispensation of facilities should rather be done

through community-based associations or groups, rather than through political affiliations.

Effective monitoring mechanisms should also be put into place to ensure that facilities are put

into proper use and to prevent the misapplication of funds.

Shelton (2006:294) advised that in order to improve the survival and performance of women-

owned ventures, programmes should be implemented to assist women in selecting appropriate

work-family management strategies. If work-family conflict is addressed, a potential

stumbling block for women business owners will be removed and the effectiveness of other

programmes will be enhanced.

Kock (2008:110) argued that many women want post-start-up support that is accessible after

trying out the skills learned in earlier training. Mentoring is one method of providing this

support, which can be very effective as it addresses the specific problems faced by the

individual entrepreneur. The support can include individual as well as group-based assistance

directed at specific problems where mentors serve as role models.

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Langowitz and Minniti (2007:341) found that women tend to perceive themselves and the

entrepreneurial environment in a less favourable light than men. Programmes aiming to

improve perceptions of aspiring women entrepreneurs may lead to higher rates of business

start-up.

Women entrepreneurship development

There is an ongoing debate as to the best way to stimulate women entrepreneurship that

contributes to both economic and social inclusion (Welter, 2004:218). A thorough

understanding how SMEs grow is an important issue because, according to Berger and Udell

(1998:613) and Radovic (2007:1), small and medium-sized enterprises provide the engine for

economic growth for many countries. There is a strong business case for promoting womens

economic development, entrepreneurship and enterprise.

As a result of gender inequalities, women remain to some degree in all parts of the globe-

untapped economic resources and underutilised economic assets (Landes, 2003:1). Non-

governmental organisations around the world are now creating and implementing projects to

encourage entrepreneurship as a pathway out of poverty. Many projects specifically target

women in third world countries (Radovic 2007:1).

Downing and Daniels (1992:1) explored female entrepreneurs growth patterns using census

survey data in Lesotho, Swaziland, South Africa and Zimbabwe. They found that:

Employment growth rates of women entrepreneurs are significantly lower than men;

females have not translated access to credit and training into increases in firms

employment to the same extent that men have; even within the same sub-sector.

Women enterprises grow more slowly than mens; women entrepreneurs are

concentrated in a narrow sub-sector and the most cited problem of female entrepreneurs is

inadequate market demand.

Identifying the most effective way of removing or reducing the barriers women face, requires

a number of initiatives (Brindley, 2005:155). Micro-financing and womens economic

empowerment movements are gaining popular recognition as keys to peace and prosperity

(Jordan, 2008:24). Mayoux (2000:18) argues that to maximise the contribution of micro-

finance to women empowerment requires equity in access to all micro-financing.

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According to Ong (2008:1), in 2006, the International Finance Corporation (IFC) made its

first line credit dedicated to women by providing funding to Nigeria to help ease access to

credit. IFC (2007:1) supported Ongs statement by showing that IFC and World Bank Group

activities include the launch of womens banking programmes in Tanzania and Uganda.

The World Bank Group (IFC, 2007:1) shows that women often benefit more than men from

business enabling environment reforms as their businesses tend to have more problems. To

address this issue, the gender and growth assessment tool was developed in Uganda, Kenya,

Tanzania and Ghana. The World Bank Group started the Gender Entrepreneurship Markets.

Gender Entrepreneurship Markets aim to help better leverage the untapped potential of

women in the emerging markets. Its activities are structured around three main goals, namely

increasing access to finance for women, adding value to IFC investment projects and

addressing gender barriers in the business-enabling environment. Examples of countries

benefiting from Gender Entrepreneurial Monitor include Guatemala, Pangaea, Mexico and

Nigeria.

The 1995 publication of the white paper on the development of small business indicates that

the government of South Africa realised the importance of developing entrepreneurship and

small businesses (ONeill & Viljoen, 2001:37). According to Maas and Herrington (2006:39),

over the last few years, the government of South Africa has undertaken a range of initiatives,

e.g. SAWEN (South African Women Entrepreneurs Network), SAWIMA (South African

Women in Mining) and TWIB (Technology for Women in Business), all with the aim of

advancing womens economic empowerment.

Maas and Herrington (2006:39) indicate that according to Duncan, the Department of Trade

and Industry (DTI) is also considering developing a set of incentives for women

entrepreneurs, such as business incubation, training and the creation of a networking

organisation for women entrepreneurs and business people. The DTI also has an initiative

called Technology for Women in Business that focuses on women entrepreneurs at all levels

of business to fast-track their skills development and to enable the embrace appropriate

technologies. In addition, ONeill and Viljoen (2001:40) indicate that in South Africa, Khula

Enterprise Finance limited was established specifically to promote the delivery of micro-

credit to rural women and the poor. Various science councils and organisations are partners in

the initiative, offering training and mentorship programmers.

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It is thus clear that aggressive initiatives by Government and NGOs in Lesotho are needed to

stimulate entrepreneurship and in particular women entrepreneurship in the country.

RESEARCH METHODOLOGY

Development of the measuring instrument

The literature study provided valuable insight into the identification of aspects influencing

women entrepreneurship. Standard questionnaires, developed by the Potchefstroom Business

School in South Africa, were used to gather data for this study. Information was gathered

regarding the biographical information of the participating women entrepreneurs, the structure

of their businesses, the motivational factors for starting their businesses, the obstacles that

they are currently experiencing and their support and development needs.

Study population and sampling method

The target population of this study was micro-, very small, small and medium-sized women-

owned businesses in Lesotho. A convenience sample was used, by means of a snowball

sampling technique, to identify women-owned businesses that could participate in this study.

To generate a preliminary list of women-owned businesses, well-known women-owned

businesses in these regions were contacted. These women acted as informants and identified

other potential women-owned businesses for inclusion in the sample. The women-owned

businesses were then contacted to gauge their willingness to participate in the study. A list of

75 women-owned businesses willing to participate in the study in the Maseru, Mafeteng and

Mohales Hoek districts in Lesotho was compiled as a result of these efforts.

Data collection

Questionnaires were mailed or delivered by hand to the women-owned businesses listed on

the database. Each questionnaire included a covering letter that guaranteed the confidentiality

of the responses, as well as a return-paid envelope in order to make it as easy as possible for

respondents to participate in the research. A total of 54 (72% response rate) usable

questionnaires were returned, which were subjected to further statistical analysis.

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Statistical analysis

Data collected was statistically analysed using STATISTICA (StatSoft, 2009) and SPSS

(SPSS, 2009). Data from the questionnaires was coded, investigated for integrity, analysed

and presented in useful outputs, such as frequency tables. The frequency tables were used to

draw conclusions and to make recommendations regarding the development of women

entrepreneurs in Lesotho.

RESULTS AND DISCUSSION

Biographical information of respondents

Biographical information of the owner-managers of the participating women-owned

businesses was obtained, including their age group classification, marital status and highest

academic qualification (see Table 3).

Table 3: Results of the biographical information of participating women entrepreneurs

Variable Frequency Percentage

Age group categoryYounger than 19 years old - -

Between 20 to 29 years old - -

Between 30 to 39 years old 21 38.89%



Older than 60 years old 2 3.70%

Marital status

Single 4 7.41%

Married 37 68.52%

Divorced 2 3.70%

Widowed 10 18.52%

Not indicated 1 1.85%

Highest academic qualification

Lower junior 11 20.37%

Junior 4 7.41%

COSC (matric) 10 18.52%

Certificate 6 11.11%

Diploma 8 14.81%

Degree 9 16.67%

Post-graduate degree 6 11.11%

It is apparent from the results that the participating women entrepreneurs are relatively

experienced (older than 30 years), but a major concern is that 28% of them obtained a highestacademic qualification lower than matric.

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Structure of the participating businesses

Information on the structure of the participating women-owned businesses was gathered and

is presented in Table 2.

Table 2: Results of the structure of the participating family businesses

Variable Frequency PercentageBusiness size (permanent employees)

Myself (micro) 12 22.22%

Between 2 to 4 employees (micro) 14 25.93%

Between 5 to 10 employees (very small) 17 31.48%

Between 11 to 25 employees (small) 4 7.41%

Between 26 to 50 employees (small) - -

Between 51 to 200 employees (medium) 1 1.85%


Industry

Retail trade 12 22,22%

Wholesale 2 3.70%

Services 13 24.07%

Manufacturing 8 14.81%

Accommodation 2 3.70%

Food - -

Agriculture 13 24.07%

Other 4 7.41%

Legal statusSole proprietorship 45 83.34%

Partnership 2 3.70%

Close corporation (CC) 5 9.26%

Company (Private) 2 3.70%

Business premises

Home-based 23 42.59%

Central business district 22 40.74%

Industrial area 3 5.56%

Agricultural land 2 3.70%


Most of the women-owned businesses that participated in this study are operated as sole

proprietorships (83.34%) either from home (42.59%) or in the CBD of the relative small

town, are very small (not bigger than 10 employees) and are operating in the retail trade

(22.22%), services (24.07%) and agricultural (24.07%) sectors, respectively.

Business start-up information

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Information gathered concerning the funding used during the start-up of the businesses, the

age of the participating businesses, the existence of role models, the experience of

entrepreneurs before self-employment and the path to business ownership is presented in

Table 3.

Table 3: Results regarding the business start-up information of the women-owned businesses

Variable Frequency PercentageStart-up funding

Personal savings 30 55.56%

Relatives 4 7.41%

Household/spouse 5 9.26%

Sold business - -

Bank loan 8 14.81%

Other 7 6.03%Role models owning businesses

Yes 26 48.15%

No 24 44.44%


Experience before self-employment

Unemployed 12 22.22%

Self-employed 4 7.41%

Worker 18 33.33%

Supervisor 5 9.26%

Middle management 15 27.78%

Top management - -

Path to business ownership

Founder 44 81.48%

Purchased 1 1.86%

Join/inherited family business 7 12.96%

Not indicated/other 2 3.70%

The majority of the participating women-owned businesses were founded by the current

owner-managers (81.48%) and used personal savings (55.56%) as start-up funding.

Motivation to self-employment

The purpose of this section was to determine the main motivational factors for women

entrepreneurs entering self-employment. The results can be utilised to determine the influence

of these motivational factors on the specific development needs of women entrepreneurs.

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Table 4: Motivation to self-employment

Variable Frequency Percentage

Need for independence 45 83.33%

Need for flexible schedules 31 57.41%

Need for a challenge 18 33.33%Dissatisfaction with salaried jobs (job/career frustration) 18 33.33%

Social status (personal achievement, to be recognised in the community) 12 22.22%

Role models and other people's influence (friends and family members) 12 22.22%

Insufficient family income (need to supplement family income) 12 22.22%

Brings high income (desire for health) 10 18.52%

Redundancy (lost your job, retrenchment) 9 16.67%

Ensure high job security 9 16.67%

Difficulty in finding a job 7 12.96%

Develop hobby 6 11.11%

Entered the family business 2 3.7%

Family tradition 1 1.9%

Table 4 indicates that a total of 45 (83.33%) of the businesses were established because the

women entrepreneurs needed independence. This is followed by 31 (57.41%) women

entrepreneurs who were motivated by the need for flexible schedules.

The need for a challenge and dissatisfaction with their salaried jobs motivated 18

(33.33%) of the women entrepreneurs, respectively. Social status, role models and the

influences of other people, including friends and family members, and insufficient family

income, motivated 12 (22.22%) women entrepreneurs. In addition, the desire for wealth

motivated only 10 (18.52%) women entrepreneurs. A total of nine (16.67%) entrepreneurs

indicated that they were motivated by high job security and redundancy. Only 12.96% (7)

of women entrepreneurs were motivated by the difficulty in finding a job and 11.11% (6)

were motivated by the further development and expansion of their hobby.

Obstacles facing participating women entrepreneurs

The respondents were requested to indicate the obstacles that they are facing while managing

their businesses (Table 5).

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Table 5: Results of the assessment of the obstacles facing women entrepreneurs

Obstacles Frequency Percentage

Lack of business management skills 37 68.52%

Lack of education and training 35 64.815

Inter-role conflict 25 46.3%Lack of female role models 19 35.19%

Lack of timely business information 19 35.19%

Risk adverse (great fear of failure) 19 35.19%

Pressure of childcare 18 33.33%

Inequality of access to credit 14 25.93%

Lack of self-confidence 9 16.67%

Inhibiting laws and regulations 8 14.81%

Family pressures 6 11.11%

Isolation from business network 6 11.11%

Socio-cultural environment 3 5.56%

Table 5 shows that 68.52%, representing 37 women entrepreneurs, indicated that they lack

business management skills, while 64.81% (35) lack education and training. A total of

46.3% (25) of the women face the problem of inter-role conflict. A total of 19 women

entrepreneurs are inhibited by a lack of timely information, a lack of role models and are

highly risk averse, representing 35.19%, respectively.

Eighteen (33.33%) women entrepreneurs indicated the pressure of childcare as an inhibitor.

The inequality ofaccess to credit is indicated by 14 (25.93%) women entrepreneurs, while

nine (16.67%) women entrepreneurs lack self-confidence in performing their entrepreneurial

activities.

Furthermore, 14.81% (8) women entrepreneurs are, according to their perceptions, inhibited

by laws and regulations. Family pressure and the isolation from business networks are

problems faced by 11.11% (6) of women entrepreneurs, respectively. The last problem,

encountered by 5.5% (3) of the participating women entrepreneurs, is the negative influences

of the socio-cultural environment.

Support needs and development of women-entrepreneurs

In developing women entrepreneurship both the government and the private sector should be

committed to take action to actively develop women entrepreneurs. It is important to

understand whether women entrepreneurs have knowledge about organisations specifically

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established for women entrepreneurship development. The knowledge of organisations

established specifically to support the women entrepreneur is very crucial in the development

of women entrepreneurship.

The participating women entrepreneurs were asked if they have any knowledge of

organisations specifically established for women entrepreneurship development. Out of 54

women entrepreneurs, only eight have knowledge about organisations established specifically

for women entrepreneurs, representing 14.81%, while 70.37% (38) do not have knowledge

about any of those organisations. Another eight (14.81) women did not indicate whether they

have knowledge or not.

The training received is part of entrepreneurship development, and as a result it was included

in the analysis. The results of the analysis are presented in Table 6 below.

Table 6: Training received by women entrepreneurs

Type of training received Frequency Percentage

Technical skills 11 84.62%

Communication skills 9 69.23%

Accounting skills 9 69.23%

Management skills 13 100%Technological skills 4 30.77%

Thirteen of the participating 54 women entrepreneurs indicated that they received training

from government agencies or the private sector. A total of 11 (84.62%) received training in

technical skills, while nine (69.23%) received training in communication skills. In addition,

the other nine (69.23%) women entrepreneurs received training in accounting skills.

Furthermore, 13 (100%) received communication skills training, while four (30.77%)

received technological skills training.

The participating women entrepreneurs were furthermore requested to indicate whether a

specific support need is applicable to them (refer to Table 7).

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Table 7: Results of the support needs of women-entrepreneurs

Specific need Frequency Percentage

Training/knowledge/skill 42 77.78%

Financial support 39 72.22%

Tools, equipment, machinery 34 62.96%Business advice, information, counselling 25 46.3%

Networking with other business owners 25 46.3%

Suitable business premises 21 38.89%

Marketing support 18 33.33%

Computer 13 24.07%

Internet services 13 24.07%

Technical support 10 18.52%

Infrastructure (roads, telephone, electricity) 9 16.67%

Transport 6 11.11%

Table 7 shows that out of the 54 participating women entrepreneurs in the Lesotho study, 39

(72.22%) indicated that they need financial support to develop their businesses, while 42

(77.78) indicated that they need to acquire business knowledge, skills and training. A total

of 34 (62.96%) women entrepreneurs indicated that they need support in the form of tools,

equipment and machinery and 25 (46.3%) need support in the form ofbusiness advice and

information.

A total of 18 (33.33%) women entrepreneurs indicated that they need marketing support,while 21 (38.89%) indicated that they need support in the form of suitable business

premises. In addition, 10 (18.52%) indicated that they need technical support, while six

(11.11%) need transport support. Networking with other business owners is needed by 25

(46.3%) women entrepreneurs. Furthermore, nine women entrepreneurs need support in the

form ofinfrastructure, while 13 (24.07%) need computer and Internet services support.

CONCLUSIONS

Women entrepreneurs in Lesotho are motivated to start their own businesses by both push and

pull factors. The most important motivators for starting a business are the need for

independence, the need for flexible work schedules, the need for a challenge, dissatisfaction

with salaried jobs, the need for social status, the influence of role models and insufficient

family income. The results of this study confirm the findings of previous researchers (Ghosh

& Cheruvalath, 2007; Heilman & Chen, 2003; Hunter-Smith, 2006; DeMartino & Barbato,

2002; Malon & Cohen, 2001; among others).

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With regard to the obstacles facing women entrepreneurs, the findings are as expected. This

means that women entrepreneurs in Lesotho are not different. They have similar challenges to

other entrepreneurs world-wide to be successful entrepreneurs. The least problems indicated

by Lesotho women entrepreneurs are the following: inhibiting laws and regulations; family

pressure; lack of self-confidence; influence of the socio-cultural environment; and isolation

from business networks.

The support and development needs indicated also reflect the obstacles. The practical

recommendations offered will try to overcome these obstacles to ensure the success of small

and medium-sized women-owned businesses in Southern Africa.

This study clearly indicates that women entrepreneurs in Lesotho lack knowledge about

organisations specifically established for women entrepreneurs. It is, furthermore, a reality

that there are insufficient organisations for women development in the country. This is,

however, an international problem.

In addition, women entrepreneurs have specific needs, such as training and skills

development, financial support and access to tools, equipment and machinery.

PRACTICAL RECOMMENDATIONS

In most cases, banks or other financial institutions, when granting credit, have the requirement

that the potential lender business should have a current account. Most of the women

entrepreneurs who participated in this study only have a savings account and as a result they

may be denied credit. It is thus recommended that women entrepreneurs in Lesotho should

hold current accounts to minimise inequality in granting credit by the banks.

It is recommended that more organisations should be established for the development of

women entrepreneurs in Lesotho. These organisations could support them with training and

development, financing the business and other support for their entrepreneurial development.

Training and development could help women entrepreneurs to obtain management skills,

including skills in preparing business plans and financial statements, which could,

furthermore, bridge the gap in the inequality in granting credit by the banks. In addition,

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awareness campaigns should be held so that women entrepreneurs could have knowledge

about those organisations with the result that they could then utilise their support and

facilities.

Government and non-governmental organisations in Lesotho should undertake a range of

initiatives to develop women entrepreneurs in Lesotho. These should include the nature and

dynamics of women entrepreneurship, the challenges of women in business and the utilisation

of technology for women in business. Financial support institutions and various councils that

may be partners in offering training and mentoring programmes should, furthermore, be

implemented.

The government should provide a free slot on national radio and television for women

entrepreneurship training, education and networking with other women entrepreneurs.

It seems that women entrepreneurs are not aware of the new development in the approval of

Act no. 60 of 2006, which removes women from minority status. For instance, banks still

need the husbands approval before granting credit. Government should monitor the

implementation of that Act. In addition, women should be aware of the Act so that they do not

allow such discrimination.

Most women entrepreneurs have the pressure of childcare and experience work-home

conflict. More crches should be built to minimise this kind of obstacle.

LIMITATIONS AND SUGGESTIONS FOR FUTURE RESEARCH

There was limited time to conduct the study with the result that some women entrepreneurs

were excluded from the study. Research on women entrepreneurship in Lesotho is limited

with few or no empirical studies in existence. As a result, literature from South African and

other countries was used.

Data on entrepreneurship is not gender specific and as a result the researcher divided data

according to the names of owners using gender specific names. In addition, the Ministry of

Trade and Industry only keeps data for the Maseru district, while other data is kept in the

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other nine districts. It was, therefore, difficult to compile data for districts other than Maseru,

Mafeteng and Mohales Hoek (Bureau of Statistics Lesotho, 2004).

The study attempted to make a contribution to the body of knowledge on women

entrepreneurship and can be regarded as a small step towards moving away from the current

dependence on anecdotal evidence and case studies. This study, however, only assessed some

of the aspects concerning women entrepreneurship in a relatively small sample and can be

regarded as an exploratory study. More comprehensive research is still needed to gain more

insight into the motivational factors for self-employment of women entrepreneurs, the

obstacles facing them and their support and training needs to enhance our understanding of

these issues.

The study was only conducted in three districts in Lesotho and due to the convenience

sampling technique and a very small sample this cannot be considered to be representative of

all small and medium-sized women-owned businesses in the country. Care should therefore

be exercised in the interpretation and utilisation of the results, and the findings of the study

cannot be generalised. In other words, the typical women-owned business could be

underrepresented in the sample.

The findings of this study were based only on descriptive, lower-level statistics. Further

research is thus needed to gain more insight into the unique challenges facing women

entrepreneurs and their training and development needs. It is recommended that more

advanced statistical procedures, such as regression and factor analyses, should be utilised in

the further development of the knowledge base to truly understand the dynamics of women

entrepreneurship.

Based on the fact that published evidence of a quantitative nature of the unique challenges

facing women entrepreneurs both nationally and internationally is still limited, the findings of

this study present challenges for further research.

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