Micro-business Environment (ME): 117 

Having Entrepreneurial Competence is only a starting point to entrepreneurship. Entrepreneurship depends critically on the micro-business environment, which can either be pro-entrepreneurial of anti-entrepreneurial. As shown in the conceptual model, the micro-business environment is a reflection of the national business environment. In a country where the legal and institutional framework is favourable to entrepreneurial activity in general, there is a higher chance that micro-business enhancing programmes backed by policy will be instituted. If the micro-business environment is pro-entrepreneurial, then businesses will have access to financing, technology and training and other support infrastructure like roads, electricity and communication. Klein and Hadjimichael (2003) have also identified environments in which theft, corruption and crime are widespread as barren lands for entrepreneurship growth. ME is concerned with those policy, economic and strategic factors that aid micro/small businesses to develop and improve on their production levels and on the quality of their goods and services, which are precursors of enhanced business performance.

Many studies (McGrath, 1997; Dhonte, 1995) have demonstrated the importance of economic policies that promote the growth and development of small businesses. There is empirical evidence (Hayami and Platteau, 1997; Elbadawi et al. 1997b;

118 Easterly and Levine, 1998) that in countries or regions where there are failings in the infrastructure that support micro-businesses, productivity declines. McCormick (1999) and Pederson (1999) have also demonstrated the role of organisations and regulatory frameworks in micro-business growth. Other researchers have also examined the impact of macro-policies such as exchange rate competiveness, and of fiscal and monetary policies (Hadjimichael and Gura, 1995; Burnside and Dollar, 1997), of policies affecting openness (Sachs and Warner, 1997; Collier and Gunning 1997) and of political institutions (Ghura, 1995; World Bank, 2008).

For the small business sector to thrive and contribute to economic growth, policy makers like the government and other non-governmental organisations (NGO) must provide the support needed by micro-businesses to survive. For example, if the taxation system of a country fails to work properly, then widespread corruption and tax evasion may hamper small business growth in much the same way as rudimentary road infrastructures could prevent easy and cheap movement of goods and services round the economy which could slow down economic activity and business growth. The World Bank Development Report (World Bank, 1997) identified the state as an important player in micro-business development.

In Chapter Three, and in Section 4.3, the conditions necessary to develop a pro- entrepreneurship economic environment such as financing of business ventures, education and training, government sector policy and programmes including favourable legal and institutional support frameworks were addressed based on research by the Global Entrepreneurship Monitor. Relying on these framework conditions, and other relevant reviewed literature such as Hallberg (2000), this study

119 assumes that micro-business growth is significantly predicted by the overall business

environment, and has therefore hypothesised a positive relationship (H5) between ME

and perceived enhanced micro-business performance (PEP). Additionally, it has been hypothesised that the creation of a pro-business environment, necessitates a good communication network, and as such, the integration of mobile telephony services in the process is important. The operationalisation of ME in the model, including questionnaire design, is based on these two hypotheses. ME is measured using four

indicators, ME1_fa, ME2_ta, ME3_ls and ME4_ce, mentioned above.

4.3.2.1 Business Financing (ME1_fa):

It measures the ease and access of micro-business owners to financing from government bodies, financial organisations such as banks as well as NGOs. It is measured using the sum of two subscales or parcels14: 

• An average of ten 5-point scales - no assistance/very large assistance (Table

5.4), plus 

• One 5- point scale - unaffordable/very affordable (Table 5.4).  

4.3.2.2 Technical/training Assistance (ME2_ta):

This measures the ease and access of micro-business owners to technical and vocational training from government bodies, financial organisations such as banks, as well as NGOs linked to their businesses. It is measured using an average of nine 5- point scales - no assistance/very large assistance (Table 5.4).

14 _{A Parcel is a battery of internally consistent questionnaire items, intended to measure an aspect of an indicator variable} 

120 4.3.2.3 Legal/Institutional Support (ME3_ls):

This measures the ease and access of micro-business owners to legal representations with respect to their businesses and the overall institutional support from government institutions like the chamber of commerce and other institutions or agencies set up specifically for micro-businesses. It also takes into consideration the level of corruption, absence of peace and political stability, and policy initiatives implemented by all actors within the micro-business sector aimed at growing the sector. It is measured using an average of eight 5-point Likert scale questionnaire items - strongly disagree/strongly agree (Table 5.4).

4.3.2.4 Infrastructure Network (ME4_in):

This measures the availability and access to basic micro-business support infrastructures like electricity, road networks, and more importantly, the availability of and access to mobile telephony services and other telecommunication services. It is measured using an average of ten 5-point Likert scale questionnaire items - strongly disagree/strongly agree (Table 5.4).