Factors influencing the growth of African immigrant-owned business in selected craft markets in the Cape metropolitan area of South Africa

Abstract

The majority of craft retail outlets in Cape Town are owned by immigrants mostly from the SADC and elsewhere on the continent. However, a notable proportion of African immigrant-owned survivalist and micro businesses that do not grow and develop into small and medium size enterprises (SMEs). Despite many studies conducted on craft businesses generally, little information exists on factors affecting the growth of African immigrant-owned craft businesses. The main objective of this study is to determine these factors. This study focused on four craft markets in the Cape Town area: Greenmarket Square, Stellenbosch, Franschhoek and Hout Bay.The population of the study comprised all African immigrants at the selected craft markets and the municipal managers responsible for managing these selected markets. The sample frame of this study constitutes African immigrant entrepreneur-owned businesses that are three or more years old, registered and located in one of the selected markets. The study utilised a mixed method approach to collect and analyse data. Questionnaires (Quantitative) were administered to 122 African immigrant entrepreneurs and in-depth interviews (Qualitative) were conducted with the three municipal managers responsible for the four selected craft markets. Quantitative data was analysed separately using Statistical Packages for Social Sciences (SPSS) software, and face-to-face interviews were analysed by means of content analysis. The results of both methods were presented in tabulated format. Pushed by the need to survive and pulled by the many tourists in South Africa, African immigrant entrepreneurs turned to the craft business. In terms of the challenges faced, it was noted that limited access to finance and difficulty in acquiring a business location were start-up challenges, whereas the growth challenges were the seasonal and irregular nature of trade and xenophobia. Emanating from the findings of this study, recommendations were made to municipality managers to persuade the financial agencies to extend their funding assistance to deserving African immigrant entrepreneurs. Local government should grant immigrants trading permits and relax some of the restrictions to allow them to have a stall and do business. The municipalities should organise workshops to educate African immigrant entrepreneurs on the benefits of selling unique products and anti-xenophobic sentiment.