Private funding, profitability and growth opportunities of immigrant SMMEs: a resource-based view

Patient Rambe, Takawira Munyaradzi Ndofirepi and Nosiphiwe Mpiti

International Journal of Business and Globalisation, 2024, vol. 38, issue 1, 83-113

Abstract: Although studies examining the relationships among private funding, profitability and growth of immigrant SMMEs have emphasised high growth ventures, research on these concepts covering nascent ventures is yet to emerge. Given the constrained access to productive resources of SMMEs, this study explored the constitution and effects of private funding on the profitability and growth of SMMEs in South Africa. A cross-sectional survey was conducted on 110 Afro hair salon SMMEs in the Free State province. The findings suggest that while debt funding constituted 36.4% of total funding of Afro hair salons, Matshonisas, group savings and bank loans combined accounted for most of the funding. Moreover, findings revealed a negative relationship between private financing and business growth. Results also revealed a negative relationship between the accessibility of private equity financing and business profitability. The study recommends the diversification of funding sources to ensure sustainable profitability and growth of SMMEs.

Keywords: immigrant SMMEs; debt financing; equity financing; business growth; profitability; funding agencies; business sustainability; resource based view; funding choices; interest rate attractiveness. (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbglo:v:38:y:2024:i:1:p:83-113

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