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Sustaining Immigrant Entrepreneurship in South Africa: The Role of Informal Financial Associations

Author

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  • Robertson K. Tengeh

    (Department of Entrepreneurship and Business Management, Faculty of Business and Management Sciences, Cape Peninsula University of Technology, Cape Town 8000, South Africa)

  • Linus Nkem

    (Department of Entrepreneurship and Business Management, Faculty of Business and Management Sciences, Cape Peninsula University of Technology, Cape Town 8000, South Africa)

Abstract

Although immigrants have been found to be particularly likely to engage in entrepreneurial activities in their host countries, very often their ability to do so is restricted by a range of challenges, including having limited access to finances. As a consequence, proactive immigrant entrepreneurs establish informal financial associations, which are known as stokvels in South Africa, in order to compensate for the general lack of available capital for their business ventures. Accordingly, this paper has sought to ascertain the role, which stokvels play in the startups and the growth of Cameroonian-owned businesses, and also the strategies which they employ. A mixed methods approach was adopted to conduct the study and purposive sampling was employed to obtain a research sample of 123 participants to respond to the survey questionnaire and 10 to take part in one-on-one in-depth interviews. The data was analysed through the use of the Statistical Package for Social Sciences (SPSS) software, which generated findings in the form of descriptive statistics. The results suggest that most emerging immigrant entrepreneurs struggle to obtain sufficient startup capital. It also emerged from the findings that stokvels played an equally significant role in providing the capital, which was necessary for the growth of their businesses. On the basis of the assumption that widening access to finance would improve both the startups and the growth of immigrant-owned businesses, the authors of this paper advocate for inclusive policy initiatives, which consider the unique characteristics of the immigrant entrepreneur. In addition, it is hoped that this paper will make a valid contribution to the discourse concerning inclusive finance and be of interest to policy makers and academics.

Suggested Citation

  • Robertson K. Tengeh & Linus Nkem, 2017. "Sustaining Immigrant Entrepreneurship in South Africa: The Role of Informal Financial Associations," Sustainability, MDPI, vol. 9(8), pages 1-16, August.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:8:p:1396-:d:107439
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    References listed on IDEAS

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    Cited by:

    1. Boyoung Kim & Hyojin Kim & Youngok Jeon, 2018. "Critical Success Factors of a Design Startup Business," Sustainability, MDPI, vol. 10(9), pages 1-15, August.
    2. Fatoki Olawale, 2018. "Environmental Sustainability Practices of Immigrant-Owned Small and Medium Enterprises in South Africa," European Review of Applied Sociology, Sciendo, vol. 11(17), pages 27-43, December.
    3. Bryan Malki & Timur Uman & Daniel Pittino, 2022. "The entrepreneurial financing of the immigrant entrepreneurs: a literature review," Small Business Economics, Springer, vol. 58(3), pages 1337-1365, March.
    4. Esther Salvi & Frank-Martin Belz & Sophie Bacq, 2023. "Informal Entrepreneurship: An Integrative Review and Future Research Agenda," Entrepreneurship Theory and Practice, , vol. 47(2), pages 265-303, March.
    5. Bundit Anuyahong & Wipanee Pengnate & Kanjana Punoiam & Supaporn Phatratkul & Chatchawal Sangthongluan, 2021. "Desired characteristics of successful start-up entrepreneurs in Prachuap Kirikhan province," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(4), pages 37-42, June.
    6. Lindiwe Ngcobo & Joseph Chisasa, 2018. "Success Factors and Gender Participation of Stokvels in South Africa," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 217-228, OCTOBER.
    7. Mabika Shingirirayi & Tengeh K. Robertson, 2021. "Sustaining Grocery Stokvels: The Dynamics And Factors That Influence Their Establishment," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 11(2), pages 69-86, June.
    8. Hammed Olabode Ojugbele & Robertson K. Tengeh & Oyebanjo Ogunlela, 2022. "COVID-19 bailout nationalism: a predicament in saving small immigrant-owned businesses in South Africa," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(6), pages 33-42, September.

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