The purpose of this paper is to examine the macroeconomic environment
of the poorest areas in Namibia, the Caprivi and Kavango regions, and
to empirically investigate the problems experienced in developing an
own business, specifically in the two largest towns Katima Mulilo and
Rundu. First, a macroeconomic analysis of the Caprivi and Kavango
regions was conducted to determine the potential for SME growth. It
was found that there was no database of businesses in the two largest
towns. Subsequently, a census of all the businesses (972) was conducted,
from which a random sample of 176 businesses was drawn. The MannWhitney,
Goodman and Kruskal’s tau and Kendall’s tau-b tests were used
to test for differences in problems between the two towns. The major
problems encountered in developing businesses were a lack of technical
training, a lack of management training, a lack of credit for working
capital, low demand and a lack of customers. Significant differences
were found between the two towns with regard to major problems
encountered. This is the first paper exploring problems experienced by
SMEs in the remote regions of Namibia. Interventions such as a training
centre for small business management training should be established in
the two towns.