Barriers To Accessing Government Financial Support For Entrepreneurs In Mthatha

Miston Mapuranga

doi:10.29284/69h3ck68

Authors

Miston Mapuranga Department of Business Management and Economics, Walter Sisulu University

DOI:

https://doi.org/10.29284/69h3ck68

Keywords:

Entrepreneurial finance, government support, administrative barriers, institutional theory, Mthatha, qualitative research, small business, South Africa.

Abstract

Despite the recognised critical role of entrepreneurs in fostering economic development, access to government financial support remains a significant impediment, particularly in under-resourced regions. This qualitative study investigates the specific barriers entrepreneurs in Mthatha, Eastern Cape, face when seeking public funding. Framed by Institutional Theory, the research conceptualises these challenges as a fundamental misalignment between entrepreneurs' informal practices and the formal, rigid institutional demands of support systems. Employing a purposive sample of 15 established micro-entrepreneurs and utilising semi-structured interviews, the study identified five interconnected systemic barriers: a daunting and opaque information landscape; prohibitive administrative and financial costs; perceptions of unfairness and non-transparent processes; a critical, yet uneven, reliance on personal networks; and a significant emotional toll culminating in frustration and resignation. The findings elucidate a self-reinforcing cycle of exclusion, wherein information asymmetry necessitates reliance on social capital, while financial burdens and procedural opacity compound the system's inaccessibility. This study contributes to the extant literature by providing a granular, context-specific analysis of these barriers, highlighting how coercive, mimetic, and normative isomorphism manifests within the local funding ecosystem. The implications underscore a need for a fundamental redesign of support schemes, advocating for a transition from a compliance-centric to a user-centric model. Recommendations include proactive multi-channel communication, simplification and decentralisation of application processes, enhanced transparency, capacity building for officials, and a review of restrictive eligibility criteria. This research offers policymakers evidence-based insights to transform financial support into a practical instrument for fostering inclusive local economic development.

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