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Financing the Start-up and Operation of Immigrant-owned Businesses: the path taken by African Immigrants in the Cape Town Metropolitan Area of South Africa

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  • Tengeh, Robertson Khan
  • Ballard, Harry
  • Slabbert, Andre

Abstract

Drawing a sample of 135 successful African immigrant-owned businesses, this paper sets out to investigate how their owners acquired the necessary capital for start-up and growth thereafter. The paper was designed within the quantitative and qualitative research paradigms, in which a triangulation of three methods was utilised to collect and analyse the data. The paper revealed that although African immigrants are characteristically at the disadvantage when it comes to accessing capital from formal financial institutions, this does not stop them from pursuing entrepreneurial activities. At the start-up stage, they typically resort to personal savings, business credit, family credit, and loans from informal financial institutions. According to the ability to raise capital, we found that a varying range of start-up capital was utilised, which tended to vary across the different ethnic groups studied. Once started, we found that the sources of additional finance available to these immigrants did not change significantly. They conventionally turned to friends, co-ethnics and self-help financial associations to ‘feed’ their need for further funding.

Suggested Citation

  • Tengeh, Robertson Khan & Ballard, Harry & Slabbert, Andre, 2011. "Financing the Start-up and Operation of Immigrant-owned Businesses: the path taken by African Immigrants in the Cape Town Metropolitan Area of South Africa," MPRA Paper 38405, University Library of Munich, Germany, revised 19 Dec 2011.
    • Handle: RePEc:pra:mprapa:38405
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Denys Uwimpuhwe & Greg Ruiters, 2018. "Organising Somalian, Congolese and Rwandan Migrants in a Time of Xenophobia in South Africa: Empirical and Methodological Reflections," Journal of International Migration and Integration, Springer, vol. 19(4), pages 1119-1136, November.

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    More about this item

    Keywords

    business start-up; immigrant-owned businesses; African immigrants; finance; capital; and South Africa;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • A10 - General Economics and Teaching - - General Economics - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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