An exploration of the factors influencing the success and failure of rural micro-business in Choiseul Province, Solomon Islands

Abstract

RESEARCH QUESTIONS Main questions: How do the challenges and opportunities that face rural micro-businesses in Choiseul Province, Solomon Islands, influence their performance and longevity?

Sub-questions: 1. How do these challenges inhibit the growth of rural micro-business? 2. How do these opportunities stimulate the growth of rural micro-business?

ABSTRACT In both developed and developing countries, SMEs are the driving forces in job creation and revenue growth. This means that the SME sector is a significant contributor to developing a country's socio-economic status. This research explores current and former local business owners' experience regarding the challenges and opportunities that affect their rural micro-businesses’ success or failure in Northeast Choiseul Province, Solomon Islands. A case study approach using semi-structured interviews was employed to generate an in-depth, multi-faceted understanding of factors affecting rural businesses in their real-life situation. Data analysis followed a thematic analysis using coding techniques to generate themes. The research findings indicated that the main reasons for rural business owners in Northeast Choiseul to operate their businesses is to support their family's wellbeing, rural peoples' livelihoods, and to support their children's education. The study also found that the main constraints facing these businesses was unreliable shipping services, poor telecommunication, and the kaon(loan or debt) system. The study further revealed that factors such as lack of working capital, kaon (debt) system, and the influence of local culture contribute to rural businesses' failure. Contrastingly, the study showed that factors such as past working experience, customer relationship, marketing (location), and social business network contribute to the success of rural businesses. The interpretation drawn here is that operating a micro-business is one of the primary sources of income for the people of Choiseul, and that there is a need to support the growth of such small-scale businesses. The research therefore recommends that relevant authorities need to assist rural business owners to improve their business performance and longevity.