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Sustainability 2017, 9(8), 1396; doi:10.3390/su9081396

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

Department of Entrepreneurship and Business Management, Faculty of Business and Management Sciences, Cape Peninsula University of Technology, Cape Town 8000, South Africa
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Received: 8 July 2017 / Revised: 3 August 2017 / Accepted: 5 August 2017 / Published: 8 August 2017
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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. View Full-Text
Keywords: sustainability; entrepreneurship; immigrant entrepreneurship; developing economy; emerging market; immigrant owned businesses sustainability; entrepreneurship; immigrant entrepreneurship; developing economy; emerging market; immigrant owned businesses
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Tengeh, R.K.; Nkem, L. Sustaining Immigrant Entrepreneurship in South Africa: The Role of Informal Financial Associations. Sustainability 2017, 9, 1396.

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