TY  - JOUR
T1  - The Role of Stokvels in Financing Immigrant-Owned Businesses in South Africa
AU - Tengeh, Robertson K. AU - Nkem, Linus 
JO  - International Business Management
VL  - 11
IS  - 8
SP  - 1681
EP  - 1691
PY  - 2017
DA  - 2001/08/19
SN  - 1993-5250
DO  - ibm.2017.1681.1691
UR  - https://makhillpublications.co/view-article.php?doi=ibm.2017.1681.1691
KW  - Cape Town
KW  -immigrant-owned businesses
KW  -cameroonians
KW  -stokvels
KW  -Informal financial institutions
KW  -policy makers
KW  -immigrant entrepreneur
AB  - 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 finance. 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 study 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 criteria for selection to respond to the questionnaire were
ownership of businesses which had been in existence for at least 3 years and membership of known stokvels.
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 was found that the majority of the respondents
to the questionnaire had started their businesses with capital in the region of R20000 (US$1473) or less.
Although, it was found that 35.1% of the respondents had drawn their startup capital from personal savings
and a further 36.5% had obtained it from either members of their families or friends, stokvels had played a
significant role in the startups of their businesses. 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. Other
findings included the fact that significant numbers of members of stokvels belong to more than one group in
order to spread the risks which are associated with belonging to a single stokvel and also in order to improve
their prospects of obtaining sufficient finance for their ventures. This study has endeavoured to gauge the
extent to which stokvels provide finance for the startups and the growth of the businesses of their members
and also to investigate the strategies which their members adopt in order to maximise their returns. On the basis
of the assumption that widening access to finance would improve both the startups and the growth
of immigrant-owned businesses, the researchers of this study advocate for inclusive policy initiatives which
consider the unique characteristics of the immigrant entrepreneur. In addition, it is to be hoped that this study
will make a valid contribution to the discourse concerning inclusive finance and be of interest to policy makers
and academics.
ER  -