Challenges in Operating Micro-Enterprises by African Foreign Entrepreneurs in Cape Town, South Africa

Abstract

The primary objective of this study was to discover the challenges in operating micro-enterprises by African foreign entrepreneurs in Cape Town. Literature on immigrant entrepreneurship was reviewed resulting in the discussion of the significance of immigrant entrepreneurship and challenges in operating micro-enterprises. Convenience sampling was employed; consequential in sample of 93 respondents. The study used mixed methods, where data were collected by conducting semi-structured personal interviews and from self-administered questionnaires. The findings show that though xenophobia is not a frequent challenge to African foreign entrepreneurs in Cape Town, it is detrimental to their enterprises. Lack of knowledge of local languages also appears to be a problem. Immigrant-owned micro-enterprises are also affected by sales fluctuations. Competition is a constraint as there are many businesses of the same nature servicing the same market. Obtaining start-up and growth funding is not easy, especially for micro-enterprises ran by African foreign entrepreneurs. Obtaining a business location is also a challenge. High rent and crime are also obstacles to the enterprises. Recommendations of the study are directed to the immigrant entrepreneurs and selected government departments, and are aimed at dealing with challenges in operating micro-enterprises by African foreign entrepreneurs.

DOI: 10.5901/mjss.2014.v5n10p205