The Characteristics and Constraints of Rural Enterprises

Abstract

This brief review paper discusses the characteristics of rural enterprises and their typical constraints in the rural milieu. In as far as rural enterprises are concerned, there is a thin line of difference between their characteristics and constraints, hence, the combined discussion of both in this paper. The rural business environment itself also contributes to the characterization of rural enterprises and also helps shape some of the associated constraints.Being a review paper, the methodology is basically premised on a literature survey of both theoretical and empirical research papers that characterize rural enterprises as well discussing their constraints. This paper is an extract of a broader literature review undertaken for a PhD study on rural enterprise development.The following constitute the major findings from the literature in as far as characteristics and constraints of rural enterprises are concerned: agriculture/land based enterprises;  small and micro businesses; less growth oriented; small size of local market; stiff competition; poor access to finance; poor transportation and communication; lack of skilled labour; low availability of business premises; informality; lack of innovativeness; poor networking opportunities; lack of technology; poor quality products; poor status of local institutions; limited business management skills and low access to business support, among others that are detailed in the paper.This paper is of value in as far as it gives a clear characterization of rural enterprises and their constraints and therefore it can be used for development of rural enterprise support policies in fostering the growth of the rural economy.