most African countries, inadequate government support in regards to policies,
services and laws has been noted as a barrier to many women entrepreneurs,
Jamali (2009). Research on factors hindering women entrepreneurs in developing
countries shows that taxation and regulations play major constraints for women
owning small scale enterprises, Haxhiu (2015).
systems causes various different impacts which vary from one business to another.
Research has it that even though some regulations may be of advantage to some
small scale businesses, in general the unfavorable impact of regulations on
SMEs can be extremely dangerous, OECD (2004) reason being many women owned
small scale enterprises are less equipped to counter negative impacts that
arise from regulations because they are inept in terms of ability as compared
to well established businesses to maneuver through the complexities of
regulatory systems. Small scale enterprises are at high risk of hindrances by
regulations because their strength stems from their flexibility. Some
regulations for example those designed by well-established and dynamic
businesses to bar small scale businesses entry into the market are extremely
detrimental to the survival of SMES.
due to the “fixed-cost” nature of regulations, its cost of burden would be more
for small enterprises than would be the case for well-established enterprises:
i.e. administrative costs entailed in compliance have a disproportionate
effect on small firms. A lot of times compliance is based on an initial fixed
cost for all firms regardless of size. This means that average compliance costs
per employee are much higher for small firms. For example, in Holland, of the Gld
7 billion spent yearly on footing administrative costs, firms with employees between
0-5 workers were required to pay yearly administrative costs of about 4,000 per
worker, while firms with staff 500 and over would pay only 200 per worker, OECD
(2004). Therefore, cost of compliance to regulation affects negatively the
investment ability of women owned small scale enterprises since it deflects an
excessive amount of resources in terms of their finances.