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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

Robertson Tengeh, Harry Ballard and Andre Slabbert

MPRA Paper from University Library of Munich, Germany

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.

Keywords: business start-up; immigrant-owned businesses; African immigrants; finance; capital; and South Africa (search for similar items in EconPapers)
JEL-codes: A10 M1 M13 (search for similar items in EconPapers)
Date: 2011, Revised 2011-12-19
New Economics Papers: this item is included in nep-afr, nep-ent, nep-iue, nep-mfd and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in African Journal of Business Management 12.6(2012): pp. 4666-4676

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