IMPACT OF RURAL ELECTRIFICATION ON SMALL SCALE ENTERPRISES IN ZOMBA

Abstract

Lack of quantitative evidence has raised debates on the extent of rural electrification’s impact on small scale enterprises. This study therefore assessed the impact of rural electrification on small scale enterprises in Jali (electrified) and Gomani (non-electrified) Trading Centres. The study used cross sectional data collected from 90 enterprise owners and 4 key informants through a semi structured questionnaire and a key informant guide, respectively. Key indicators for small scale enterprises included type of enterprises, profits and daily operating hours. The results showed that electricity connectivity was significantly correlated with the type of enterprise, profits and daily operating hours. There was also evidence of existing gender differences in daily operating hours in electrified enterprises. Holding all factors constant, further tests were done to compare the sample groups using the key indicators. The Wald Tests showed no significant differences in profits and daily operating hours between electrified and non-electrified enterprises in Jali and between non-electrified enterprises in Jali and Gomani. The Tests’ results further showed that there were significant differences in profits and daily operating hours between electrified enterprises in Jali and non-electrified enterprises in Gomani. The conclusion drawn from the study results is that rural electrification has an influence on small scale enterprises. The policy implications include: encouraging electrified enterprise owners to utilize credit loans to boost their capital and providing them with business training to enhance their business skills and fully utilize electrification opportunities in small scale enterprises.