The impact of social and institutional networks in sustaining South African rural small, medium and micro enterprises during the crisis

Abstract

Orientation: The coronavirus disease 2019 (COVID-19) and its subsequent variants, has exposed the ill-preparedness of Small, Medium and Micro enterprises (SMMEs) to grow and sustain themselves and, by extension, livelihoods after the pandemic induced socio-economic crises around the world.

Research purpose: This study aimed to contribute to an understanding of the impact of social and institutional networks in sustaining South African rural SMMEs during the crisis in rural municipalities.

Motivation for the study: Previous studies on the sustainability of South Africa’s SMMEs have identified challenges and opportunities for urban-based SMMEs without clarifying the roles of rural-based social and institutional networks. This study was an attempt to fill that gap.

Research design, approach and methods: This qualitative research design used an interpretative research paradigm to achieve the research objectives. Data were collected from 34 purposively (social network analysis group interviews) and 35 snowballing (semi-structured one-on-one interviews) selected participants from two rural municipalities. Data were analysed using NVivo 12 software.

Main findings: The findings of the study revealed that, in the absence of provincial and nationally based institutions, rural SMME supportive groups established alternative local social and institutional networks to sustain their SMMEs in the post-socio-economic crisis period.

Practical/managerial implications: It is therefore recommended that all the institutions must work together to transform rural SMMEs from their unsustainable state to sustainability (post socio-economic crisis).

Contribution/value-add: By drawing on the critical elements of the sustainable livelihoods framework and institutional theory, this study proposed a conceptual model for sustaining rural SMMEs during crisis.