African Journal of Business Management Vol. 1 (1), 001-007, February 2007          
© 2007 Academic Journals

Full Length Research Paper

 Heterogeneity among Zimbabwe’s rural micro-enterprises and the determinants of their inclination to agro-dealership

Richard Foti^1*, Nyararai Mlambo², Violet Muringai¹, Zira Mavunganidze¹ and Cletos Mapiye¹

¹Bindura University of Science Education Department of Agricultural Science P.O. Box 1020, Bindura, Zimbabwe.

²Bindura University of Science Education Department of Computer Science P.O. Box 1020, Bindura, Zimbabwe.

*Corresponding author. E-mail:  richfoti@yahoo.com , Fax: 263 71 7534. Tel: 263 71 7621.

Accepted 23 January, 2007

Rural micro-enterprises play a pivotal role in developing country agriculture as the major sources of inputs and ready markets for agricultural produce. This makes an understanding of their diversity and dynamism vital to issues of sustainable food security and poverty alleviation. This paper uses cluster analysis and a logit regression model to establish the factors underlying the heterogeneity of micro-enterprise firms with a view to unearth the reasons behind their inclination towards agro-dealership. Rural micro-enterprises were found to vary greatly due to size, firm life, capital intensity and their motives for entry into business. Capital intensity in tern determines firm size, willingness to expand and the firm’s likelihood to stay in business. Larger firms with a long firm life and a high capital base were found to have a greater tendency to deal in agribusiness commodities as opposed to small firms with lower capital intensity and a short firm life. It was concluded that firm proclivity to agro dealership could be increased through increasing capital base and provision of incentives for voluntary entry into business.

Key words: micro-enterprises; cluster analysis; agro dealership; logit model; capital intensity.