Supporting Small-Scale Micro-Entrepreneurship in South Africa’s Townships

Gibson Mudiriza, Samantha De Martino and Wendy Cunningham

No 210207, The Social Policy and Labor Discussion Paper Series from The World Bank

Abstract: Drawing on qualitative data from 11 key informants and 75 small-scale firm owners in South Africa’s townships, this paper identifies five factors shaping micro-entrepreneurial success. First, micro-entrepreneurship often begins as employment of last resort but evolves into a deliberate choice as owners value its autonomy and independence. Second, social and communal networks expand access to shared resources, information, and markets. Third, complex processes and limited benefits discourage firm registration, even though entrepreneurs feel that it boosts customer trust and patronage. Fourth, access to government support is low, hindered by perceived program irrelevance and stringent eligibility criteria. Fifth, success depends less on finance than on resilience, resourcefulness, and mindset. These findings underscore the need for holistic programs offering business training, socio-emotional skills, mentorship, and collective business strategies tailored to the township economy.

Date: 2026-05-07
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