i 
 
 
 
 
 
 
 
Role of supporting and stimulating the 
township economy and informal sector in the 
Gauteng townships 
 
S Kubone 
orcid.org  0000-0000-0000-0000 
 
 
Mini-dissertation submitted in partial fulfilment of the 
requirements for the degree Master of Business 
Administration at the North-West University 
 
 
Supervisor: Prof SP van der Merwe 
 
 
 
Graduation ceremony: May 2019 
Student number: 27830497 
 
ii 
 
DECLARATION 
 
I, Sigcino Kubone, Student Number 27830497 do confirm that all work of  this mini-
dissertation is the result of my research work, and that this it has never been submitted by 
myself for any educational institution before, whether partly or in full. 
______________ 
Sigcino Kubone        20 November 2018 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
iii 
 
ACKNOWLEDGEMENTS 
 
I would to thank the all individuals for their inputs for me to complete the mini-dissertation: 
 
 My Heavenly Father, who has blessed and protected me during the course of this study. 
I thank Him for His guidance and wisdom upon me.  
 My Academic Mentor, Prof. Van der Merwe for his contribution, encouragement and 
guidance. I would like to thank express my greatest appreciation, thank you and thank 
you again.  
 My daughters, Zinhle and Nokwanda Kubone who they once said Daddy is boring since 
I have been on books the whole time. 
 Family, for all their ever no ending support and never failing, continuous pushing me 
throughout my years of studies. Especially with research and writing work for this 
dissertation. 
 My Syndicate Group Members, for sharing ideas with me and guidance throughout 
different study modules that prepared me for this report. 
 Lupi Ngcayisa, for all the assistance from the Economic Development, Environment, 
Agriculture and Rural Development department in Gauteng provincial legislator. 
 Twitter family, for directing me straight to participants and completing those small 
twitter surveys that guided me to crucial information about this research. 
 My friends and relatives for their support. 
 
I thank you. 
Sigcino Kubone 
 
 
 
 
 
 
 
iv 
 
ABSTRACT 
 
The purpose of this research study was to look at different ways of supporting and stimulating 
the township economy and informal sector. There is a need to investigate whether township 
business sector and communities do benefit from interventions that are coming from different 
bodies, which are supporting the developments and the sustainability of township economies. 
However, township entrepreneurs are struggling to survive and grow their businesses due to 
the socio-economic challenges that are affecting negatively their daily entrepreneurial 
activities. These challenges creates obstacles that hinders entrepreneurship growth, 
entrepreneurial opportunities, creation of income and employment, and business survival.  
 
The study had the primary objective to investigate the role of supporting and stimulating the 
township economy and informal sector in Soweto Township under the Gauteng Province. The 
case study objective was based on outcomes of supporting and stimulation of the township 
economy and informal sector. For every input from any interventions, there is supposed to be 
expected results of delivery, achieving the intended purpose and corrective actions when there 
are deviations. Quantitative research approach has been followed in this study and the key 
findings of the study provides the information from Sixty eight (68) respondents sampled from 
the township of Soweto. Other supplementary information was researched from journals, 
observation and interviews with interested stakeholders on this particular research problem. 
The data was gathered by means of a questionnaire.  
 
This study has shown that there are many challenges and constraints facing township 
entrepreneurs that need to be overcome, challenges such as historical background of township 
location, aging infrastructure, lack of investing to townships, overpopulation, lack of resources, 
informality and regulation, non-compliance to payment of rate and taxes and low employment 
levels. Furthermore, the study identified that there is a need to create an enabling environment, 
economic infrastructure support, training and roll-out for enterprise development in the 
townships.  
Key terms: Entrepreneurship, informal economy, informal sector, township economy, small 
(micro) business, job creation, entrepreneurial activity growth, Soweto. 
v 
 
LIST OF FIGURES 
 
FIGURE 1.1: THE MAP SHOWING THE SOWETO TOWNSHIP ........................................................... 7 
FIGURE 2.1: ENTREPRENEURSHIP AND THE CORRESPONDING STAGES DEVELOPED .................... 18 
FIGURE 2.2: ENTREPRENEURSHIP VIEW AS WHICH FACTORS WILL HAVE THE HIGHEST IMPACT ON 
ENTREPRENEURSHIP CULTURE ........................................................................................... 33 
FIGURE 4.1: DISTRIBUTION OF ACADEMIC QUALIFICATION OF ENTREPRENEURS ........................ 52 
FIGURE 4.2: DISTRIBUTION OF OCCUPATIONAL BACKGROUND (PREVIOUS OCCUPATIONAL 
BACKGROUND)  .................................................................................................................. 53 
FIGURE 4.3: YEARS SELF - EMPLOYED ....................................................................................... 54 
FIGURE 4.4: FORMAL REGISTRATION STATUS OF YOUR BUSINESS ............................................. 56 
FIGURE 4.5: DURATION OF THE BUSINESS OPERATING............................................................... 57 
FIGURE 4.6: PATH TO BUSINESS OWNERSHIP ............................................................................. 58 
FIGURE 4.7: SOURCE OF START-UP FUNDING  ............................................................................ 59 
FIGURE 4.8: INDICATE YOUR BUSINESS PREMISES ..................................................................... 60 
FIGURE 4.9: PERMANENT EMPLOYEES EMPLOYED BY YOUR BUSINESS ...................................... 61 
FIGURE 4.10: HAVE YOU EVER RECEIVED ANY TRAINING FROM THE GOVERNMENT? ................ 62 
FIGURE 4.11: STATUS OF BUSINESS OWNERSHIP ....................................................................... 63 
FIGURE 4.12: ANY DEVELOPMENT, TRAINING AND SUPPORT GAINED FROM ANY PUBLIC AND 
PRIVATE SECTOR?  ............................................................................................................. 68 
FIGURE 4.13: TYPE OF TRAINING RECEIVED BY ENTREPRENEURS .............................................. 69 
FIGURE 4.14: OBSTACLES EXPERIENCED IN APPLICATION PROCESS FOR FINANCIAL ASSISTANCE
 .......................................................................................................................................... 70 
FIGURE 4.15: REASON FOR FINANCIAL APPLICATION REJECTION ............................................... 71 
FIGURE 4.16: INSTITUTION APPROACHED TO FINANCE YOUR BUSINESS ..................................... 72 
FIGURE 4.17: IF YOU HAVE APPROACHED FINANCIAL INSTITUTION ABOVE (E4) QUESTION, 
INDICATE WHY?  ................................................................................................................ 73 
FIGURE 4.18: DO YOU BELIEVE ENTREPRENEURS NEED TRAINING?  .......................................... 74 
FIGURE 4.19: INDICATE WHICH FIELD DO YOU NEED TRAINING?  .............................................. 75 
 
 
 
 
vi 
 
LIST OF TABLES 
 
 TABLE 2.1: DIFFERENT TYPES OF ENTREPRENEUR DEFINITIONS ............................................... 19 
TABLE 2.2: SUMMMARISED TOWNSHIP ECONOMIC REVITALISATION STRATEGY BY GAUTENG 
PROVINCIAL GOVERNMENT ............................................................................................... 20 
TABLE 2.3: SOUTH AFRICA EMPLOYMENT AND ITS VARIATION GROWTH FOR 1995 - 2016 ...... 25 
TABLE 2.4: SCHEDULE OF SIZE STANDARDS FOR THE DEFINATION OF SME’S  .......................... 31 
TABLE 2.5: SOUTH AFRICA CATEGORIES OF SMME’S.............................................................. 32 
TABLE 2.6: ALTERNATIVE EXTERNAL FINANCING TECHNIQUES FOR SME’S AND ENTREPRENEURS
 .......................................................................................................................................... 35 
TABLE 3.1: QUANTITATIVE RESEARCH  ADVANTAGES AND DISADVANTAGES METHOD ............. 40 
TABLE 4.1: ECONOMIC SECTOR OF YOUR BUSINESS .................................................................. 55 
TABLE 4.2: THE DIMENSIONS OF ENTREPRENEURIAL MOTIVATIONAL FACTORS ........................ 64 
TABLE 4.3: THE DIMENSIONS FACTORS THAT HINDERS TOWNSHIP ENTREPRENEURS TO START 
THEIR OWN BUSINESS ......................................................................................................... 65 
TABLE 4.4: THE DIMENSIONS FACTORS (OBSTACLES) THAT TOWNSHIP ENTREPRENEURS ARE 
FACING CURRENTLY IN THEIR RUNNING BUSINESSES.......................................................... 67 
TABLE 4.5: THE RELIABILITY STATISTICS IN MEASURING SECTION C & D ................................. 76 
TABLE 4.6: RELIABILITY OF THE CONSTRUCTS MEASURING MOTIVATIONAL CLIMATE .............. 76 
TABLE 4.7: RELIABILITY OF THE CONSTRUCTS MEASURING OBSTACLES FACED BY TOWNSHIP 
ENTREPRENEURS TO START BUSINESSES  ............................................................................ 78 
TABLE 4.8: RELIABILITY OF THE CONSTRUCTS MEASURING OBSTACLES YOU ARE CURRENTLY 
FACING IN RUNNING YOUR BUSINESS ................................................................................. 79 
TABLE 4.9: ANOVA – THREE FACTORS BY HIGHEST EDUCATION ............................................. 80 
TABLE 4.10: ANOVA – THREE FACTORS BY PREVIOUS OCCUPATION ....................................... 81 
TABLE 4.11: ANOVA – THREE FACTORS BY YEARS OF SELF-EMPLOYED ................................. 82 
TABLE 4.12: CORRELATION MATRIX SUMMARY ........................................................................ 83 
TABLE 4.13: STRENGTH OF RELATIONSHIP BETWEEN VARIABLES ............................................. 83 
TABLE 4.14: COHEN’S D - VALUES MEASUREMENTS  ................................................................. 84 
TABLE 4.15: RELATIONSHIP BETWEEN VARIABLES MEASURING THE LEGAL STATUS OF YOUR 
BUSINESS AND VARIABLES ................................................................................................. 85 
TABLE 4.16: RELATIONSHIP BETWEEN VARIABLES MEASURING ANY FORM OF TRAINING FROM 
GOVERNMENT/ PRIVATE SECTOR RECEIVED AND THE VARIABLES ...................................... 85 
vii 
 
LIST OF ACRONYMS AND ABBREVIATIONS 
CSBD    Centre for Small Business Development’s 
DTI    Department of Trade and industry 
SEDA    Small Enterprise Development Agency 
Stats SA   Statistics South Africa 
TEA    Total Entrepreneurial Activities 
TERS    Township Economic Revitalisation Strategy 
 
  
viii 
 
TABLE OF CONTENT 
 
DECLARATION..................................................................................................................... II 
ACKNOWLEDGEMENTS ................................................................................................. III 
ABSTRACT ........................................................................................................................... IV 
LIST OF FIGURES ................................................................................................................ V 
LIST OF TABLES ................................................................................................................ VI 
LIST OF ACRONYMS AND ABBREVIATIONS ......................................................... VIII 
TABLE OF CONTENT ........................................................................................................ IX 
CHAPTER ONE ...................................................................................................................... 1 
INTRODUCTION.................................................................................................................... 1 
1.1 INTRODUCTION .................................................................................................................. 1 
1.2 PROBLEM STATEMENT ....................................................................................................... 2 
1.3 DEFINATION OF KEY TERMS ............................................................................................... 3 
1.3.1 Informal economy ...................................................................................................... 3 
1.3.2 Informal sector ........................................................................................................... 4 
1.3.3 Township economy.................................................................................................... 4 
1.3.4 Entreprenuership ........................................................................................................ 4 
1.4 RESEARCH STUDY OBJECTIVES .......................................................................................... 5 
1.4.1 Primary objectives ..................................................................................................... 5 
1.4.2 Secondary objectives ................................................................................................. 5 
1.5 SCOPE OF STUDY................................................................................................................ 5 
1.5.1 Field of study ............................................................................................................. 5 
1.5.2 Geographical .............................................................................................................. 6 
1.6 RESEARCH METHOD ........................................................................................................... 7 
1.6.1 Phase A: Literature/Theoretical review ..................................................................... 7 
1.6.2 Phase B: Empirical study ........................................................................................... 8 
1.6.2.1 Research type design .............................................................................................. 9 
1.6.2.2 Population/sampling ............................................................................................... 9 
1.6.2.3 Data analysis and interpretation ........................................................................... 10 
1.6.2.4 Data collection ...................................................................................................... 10 
1.6.2.5 Reliability & validity ............................................................................................ 11 
1.6.2.6 Ethical consideration ............................................................................................ 11 
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1.7 LIMITATIONS ................................................................................................................... 11 
1.8 THE STUDY LAYOUT ........................................................................................................ 12 
CHAPTER TWO ................................................................................................................... 14 
LITERATURE REVIEW ..................................................................................................... 14 
2.1 INTRODUCTION ................................................................................................................ 14 
2.2 EVOLUTION OF ENTREPRENEURSHIP AND ITS THEORIES .................................................. 15 
2.3 THE VIABILITY OF INFORMAL BUSINESS OWNER ACTIVITIES .......................................... 18 
2.4 THE TOWNSHIP ENTREPRENEURSHIP ............................................................................... 19 
2.5 ROLE OF ENTREPRENEURSHIP IN JOB CREATION ............................................................... 22 
2.6 A BROADER DEFINITION OF TOWNSHIP AND ITS ECONOMIES ........................................... 22 
2.7 THEORETICAL FRAMEWORK FOR  TOWNSHIP ECONOMY .................................................. 24 
2.8 SOUTH AFRICA UNEMPLOYMENT AND ECONOMY ISSUES ................................................. 25 
2.8.1 Youth unemployment from a South African perspective ........................................ 27 
2.8.2 Global Entrepreneurship Monitor (GEM) reports and job creation ........................ 27 
2.9 GENERAL CHALLENGES OF STARTING A BUSINESS IN SOUTH AFRICA .............................. 27 
2.10 INSTITUTIONS THAT SUPPORT ENTREPRENEURSHIP ........................................................ 28 
2.11 CHALLENGES FACING TOWNSHIP ENTREPRENEURS AND GOVERNMENT CONTRIBUTIONS
 .............................................................................................................................................. 28 
2.11.1 Government contribution ....................................................................................... 29 
2.11.2 South Africa Incubators ......................................................................................... 29 
2.11.3 Challenges facing township entrepreneurs ............................................................ 29 
2.11.4 Constraints on informal street trading ................................................................... 30 
2.12 IMPROVING ENTREPRENEURSHIP ACTIVITIES ................................................................. 30 
2.13 THE INFORMAL SECTOR AS MEANS OF BUSINESS AND SURVIVAL ................................... 30 
2.14 SOUTH AFRICA SMME’S SECTOR ................................................................................. 31 
2.15 ACCESS TO CREDIT AND FINANCING .............................................................................. 33 
2.15.1 Overview through access to finance and support from institutions ....................... 34 
2.15.2 Factors considered by banks when offering credit ................................................ 34 
2.15.3 Alternative financing instruments ......................................................................... 35 
2.16 ECONOMIC IMPACT OF SOWETO. .................................................................................... 36 
2.16.1 Soweto economics overview ................................................................................. 36 
2.16.2 SMME development in Soweto Township ............................................................ 36 
2.17 SUMMARY. ................................................................................................................... 37 
CHAPTER THREE ............................................................................................................... 38 
x 
 
RESEARCH METHODOLGY ............................................................................................ 38 
3.1. INTRODUCTION ............................................................................................................... 38 
3.2. THE RESEARCH TYPE DESIGN ........................................................................................ 38 
3.2.1 Survey ...................................................................................................................... 40 
3.3. THE RESEARCH APPROACH ............................................................................................. 41 
3.3.1. The quantitative research work ............................................................................... 42 
3.3.2. Contents of the quantitative research questionnaire ............................................... 42 
3.4 TIME FRAME HORIZON .................................................................................................... 42 
3.5 UNIT OF ANALYSIS .......................................................................................................... 43 
3.6 RESPONDENTS TO THE SURVEY ........................................................................................ 43 
3.6.1. Sampling Strategies ................................................................................................ 43 
3.6.2. Sample Size Collected and Framework .................................................................. 44 
3.7. METHODS UTILISED TO OBTAIN DATA ............................................................................. 44 
3.7.1. Primary Data and the Collection Tool Instruments ................................................ 45 
3.72 Questionnaire Technique .......................................................................................... 45 
3.7.3 The Pilot Study ........................................................................................................ 46 
3.8 VALIDITION AND RELIABILITY ........................................................................................ 46 
3.8.1 Validation and Validility of this case study............................................................. 46 
3.9 DATA ANALYSIS INTERPRETATIONS ................................................................................ 47 
3.10 LIMITATIONS ................................................................................................................. 48 
3.11 STUDY CHAPTER SUMMARY .......................................................................................... 48 
CHAPTER FOUR .................................................................................................................. 50 
DISCUSSION AND RESULTS OF EMPIRICAL STUDY ............................................... 50 
4.1 INTRODUCTION.................................................................................................................... 50 
4.2 MEASURING INSTRUMENT ................................................................................................... 50 
4.3 Study results ....................................................................................................................... 50 
4.4 Statistical data analysis ...................................................................................................... 50 
4.5 Descriptive statistics and frequencies ................................................................................ 51 
4.5.1 Distribution of the highest academic qualifications of the entrepreneurs ............... 52 
4.5.2 Distribution of occupational background (previous occupational background) ..... 53 
4.5.3 Number of years self-employed .............................................................................. 54 
4.5.4 Economic sector where your business operate ........................................................ 55 
4.5.5 Formal registration status of your business ............................................................. 56 
4.5.6 Duration off your business in operation .................................................................. 57 
xi 
 
4.5.7 Path of business ownership ...................................................................................... 58 
4.5.8 Source of start-up funding ....................................................................................... 59 
4.5.9 Business premises where the business operate ........................................................ 60 
4.6.1 Number of employees employed by your business ................................................. 61 
4.6.2 Any form of training received from the government? ............................................. 62 
4.6.3 Is the present business the first that you own? ........................................................ 63 
4.6.4 Variables mmeasuring entrepreneurial motivational factors ................................... 63 
4.6.5 Variables measuring obstacles faced by entrepreneurs ........................................... 65 
4.6.6 Variables measuring factors currently facing entrepreneurs in running their 
businesses ......................................................................................................................... 66 
4.6.7 Any development, training and support gained from any public and private sector? 
 .......................................................................................................................................... 68 
4.6.8 Type of training received by entrepreneurs ............................................................. 69 
4.6.9 Type of obstacles experienced during the financial application process ................. 70 
4.7.1 Reason (s) for finacial application rejection ............................................................ 71 
4.7.2 Institution (s) approached to finance your business ................................................ 72 
4.7.3 Indicate if you not approached financial institution (s) on figure 4.15? .................. 73 
4.7.4 Do you believe that entrepreneurs need training? ................................................... 74 
4.7.5 Indicate the field where you need training? ............................................................. 74 
4.6 RELIABILITY OF THE QUESTIONNAIRE IN MEASURING THE CONSTRUCTS .......................... 75 
4.7 DISCUSSION AND RESULTS OF THE CONSTRUCTS ............................................................. 76 
4.8 ANALYSIS OF VARIANCE (ANOVA) ................................................................................ 80 
4.8.1 Three factors (ANOVA) by highest education ........................................................ 80 
4.8.2 Three factors (ANOVA) by previous occupation .................................................... 81 
4.8.3 Three factors (ANOVA) by Years of self-employed .............................................. 82 
4.9 CORRELATION ANALYSIS ................................................................................................. 82 
4.10 ANALYSIS OF T-TESTS ON LEGAL STATUS OF YOUR BUSINESS ....................................... 84 
4.11 ANALYSIS OF T-TESTS ON ANY FORM OF TRAINING FROM GOVERNMENT/PRIVATE SECTOR
 .............................................................................................................................................. 85 
4.12 SUMMARY OF RESEARCH FINDINGS ............................................................................... 86 
CHAPTER FIVE ................................................................................................................... 88 
SUMMARY AND THE STUDY CONCLUSION .............................................................. 88 
5.1 INTRODUCTION ................................................................................................................ 88 
5.2 MAIN FINDINGS AND PURPOSE OF THIS CASE STUDY ........................................................ 88 
xii 
 
5.3 LIMITATIONS OF THE STUDY ............................................................................................ 90 
5.4 CONCLUSION AND RECOMMENDATION FOR THE STUDIES................................................. 90 
5.5 RECOMMENDATIONS FOR FUTURE STUDIES ..................................................................... 92 
5.6 SUMMARY ....................................................................................................................... 92 
REFERENCES ....................................................................................................................... 94 
ANNEXURE A: STUDY QUESTIONNAIRE .................................................................. 106 
ANNEXURE B: LANGUAGE EDITOR’S CONFIRMATION LETTER .................... 115 
 
 
 
1 
 
CHAPTER ONE 
NATURE AND THE EXTENT OF THE STUDY 
 
1.1 INTRODUCTION 
 
According to Swanepoel, Strydom and Nieuwenhuizen (cited by Chimucheka, 2014:403), the 
unemployment rate is very high, low economic growth rate and low Total Entrepreneurial 
Activity (TEA) in South Africa, and its causing a threat to the economy. According to Tarborda 
(cited by Manyaka-Boshielo, 2017:1), poverty is very high in South Africa and also the youth 
are jobless. Worldwide, entrepreneurship is regarded as one of the important solution to 
unemployment, slow pace economic growth and also in reducing poverty (Smith et al., 
2017:164). The country is ranked lower out of fifty-nine (59) countries from the survey of 2012 
by Global Entrepreneurship Monitor, ranked at twenty seven (27) (GEM, 2012:13).  
 
South Africa had an initial plan after 1994, focusing on transforming the country through a 
reconstruction and development program (Republic of South Africa Parliament, 1994). The 
unemployment rate in South Africa is currently 27.7% as indicated in the third quarter of 2017 
and GDP in the third quarter of 2017 grew by 2.0% (StatsSA, 2017). In order for the township 
small businesses to play a role in the economic developments, government policies must be 
favorable to small business regulations (Manyaka-Boshielo, 2017:9). 
 
The government of South Africa has devoted sizeable resources in support of small businesses 
since 1994 (Phillips et al., 2014:86). The government through its economic policies, South 
Africa launched a National Development Plan (NDP) as a detailed blueprint and a vision that 
can eliminate poverty and reduce inequality by the year 2030 as forecasted (National 
Development Plan, 2011:14). The NDP forecast for 2030 is that; about 90% of the new eleven 
million jobs would be created by the small medium size enterprises and the revitalisation of 
township economy is rooted from the overall vision of the National Development Plan 
(Government Gazette, 2012). According to Chimucheka (2014:403) entrepreneurship 
education is developing and improving the competencies that are needed to successfully 
establish and run some entrepreneurial businesses. 
 
In 2008, the minister of finance Pravin Gordhan, reckons that the economy expansion growth 
rate has been slow and failing both the formal and public sector to absorb job seekers in South 
2 
 
Africa (Republic of South Africa Parliament, 2008). Despite of all effort from policy makers, 
our monetary and fiscal policies are not well synchronising to stabilise our economic situation 
and the 2008 economic downturn reversed all the positive economic gains that our country 
economy had achieved.  
 
The things that work against and prevent the implementation that will drive the township 
economy is the historical background of township location, aging infrastructure, lack of 
investing to townships, overpopulation, lack of resources and low employment levels. Most 
businesses in townships are normally the retail spaza shops, hair salon, shebeens (township 
pubs), shisanyama (meat place), informal motor mechanics, and other small scale businesses 
as informal traders. The informal small medium enterprises could assist in addressing some of 
the key challenges of employment creation and economic stimulation growth in vulnerable and 
affected areas (Charman et al., 2015:1). 
 
Informal trader refers only to people who conduct informal street trading on a small scale, 
mostly from street pavements, and who as a group offer a large variety of products and basic 
services to prospective clients (Willemse, 2011:7). The informal economy contributes 
significantly too many developing countries to the provision of employment to the people and 
right though the most African countries (Fleetwood, 2009:23; Neves, 2010:2). In recent studies 
done on the township economy found that most township businesses are at survivalist stage 
and informal, townships entrepreneurs face more challenges of taking their small businesses to 
another high level that generate broader economic benefits (World Bank Study, 2014).  
 
1.2 PROBLEM STATEMENT  
 
The research study focused on establishing the role and outcomes by the provincial government 
and interested non-governmental groups, in supporting and stimulating or revitalisation of the 
township economy as its problem statement. The case study investigates the role of support 
and intervention as another approach of developing a sustainable township economy, so that 
poverty can be reduced or totally removed from township and residents can begin to play a role 
in the economic activities and developments. In South Africa, economic development has 
become characterised by the ‘new norms’ of higher unemployment, lower productivity growth 
and subdued economic growth as mentioned in Global Entrepreneurship Monitor (GEM) report 
(Herrington et al., 2015:25). In their efforts to encourage entrepreneurial developments and 
support of new generation of entrepreneurs, policy-makers and service providers will require 
3 
 
to identify and work to reduce factors that challenges entrepreneurial intentions (GEM report, 
2015:26).  
 
Entrepreneurship is considered to be an important mechanism driver of sustainable economic 
growth through job creation, innovation and its welfare effect (Herrington et al., 2016:23). 
Mentorship networks intervention is required and necessary to entrepreneurs and through their 
entrepreneurial journey by provided them with an opportunity to have people that will mentor, 
inspire and coach them so that they will be more effective on their businesses (GEM report, 
2016:73).  
 
According to the South African Institute of Charted Accountants (SAICA) on the SME report 
(2015:4), the NDP proposes that for South Africa to overcome poverty, and to reduce the 
proportion of people who are dependent on welfare payments from the state, the SME sector 
would have to grow significantly. Furthermore the NDP expects that by 2030, 90% of new jobs 
will be created by the (Small Medium Enterprise) SME sector (SAICA report, 2015:4). The 
objective of this study is to understand forces that work against the efforts that undermines the 
township entrepreneurship developments in Soweto. 
 
1.3 DEFINITION OF KEY TERMS 
 
1.3.1 Informal economy 
 
The International Labour Organisation Conference (ILO) launched the concept termed 
“informal economy” in 2002, as an attempt to incorporate in the definition of this concept, as 
other forms of informal employment that were not considered in this notion (Ouédraogo, 
2017:257). The definition of this concept informal sector refers to all activities used to 
producing goods or services that are unregulated and hardly fit into any of the known 
conventional economic categories (Ouédraogo, 2017:257). The International Labour 
Organisation defines it as “all economic activities by workers and economic units that are, in 
law or in practice, not covered or insufficiently covered by formal arrangements and informal 
work which can be carried out across all the sectors of the economy both in public and private 
spaces’. There are activities that are viewed as part of the informal sector and ranges from 
fringe and survival strategies like the street vending, letter writing, and shoe shining and to 
more organised operating units of small artisans, mechanics, and carpenters (Ouédraogo, 
2017:258). 
4 
 
1.3.2 Informal sector 
 
The informal sector primary market lies in the provision of basic consumer services and goods 
to people as consumers in the low-income categories which refers to production and 
employment in unregistered enterprises (Meagher, 2013:2). It can be referred to as people who 
conduct informal street trading on a small scale, mostly from street pavements and who offers 
as a group a variety of products and basic services (Willemse, 2011:1). According to Willemse 
(2011:1) it can be seen from the previous mentioned definition, that the informal economy 
includes a variety of different types of employment. In the statistical South Africa report, the 
term iinformal employees are described as employees with no contract of employment, with 
no income tax registration, and receive no work benefits (StatsSA, 2011:XVII). 
 
1.3.3 Township economy 
 
‘Township economy’ refers to enterprises and markets based in the townships where business 
activities are located and in that township settlements (Charman, 2015:1). According to 
Charman (2015:1) township entrepreneurs operates these business enterprises in the township 
to meet primarily the needs of township consumers and it can be understood as ‘township 
enterprises’. 
 
1.3.4 Entrepreneurship 
 
Imafidon (2014:101) refers to entrepreneurship as origin of economic extension and good 
entrepreneurial in business activities drive have an impact that is positive for that country and 
quality life. The SMMEs as part of entrepreneurship has a responsibility of creating jobs in all 
economies and in Africa it would help specifically in poverty alleviation, economic growth and 
job creation (Cant, 2016:559). According to Jili, Masuku and Selepe (2017:1) there are 
different government initiatives that support small businesses and in turn are assisted by the 
trade and industry department and other associated organisations and agencies such as Ntsika 
Enterprise Promotion Agency, Centre of Small Business Promotion (CSBP), and Khula 
Enterprise Finance. 
 
 
 
 
5 
 
1.4 RESEARCH STUDY OBJECTIVES 
 
1.4.1 Primary objectives 
 
The overall aim of this study was to investigate the role of supporting and stimulating the 
township economy and informal sector in Gauteng townships as the township of SOWETO, 
selected for this research.  
 
1.4.2 Secondary objectives 
 
Objectives that are secondary for this study were: 
 To identify the outcome role of support and major challenges facing township 
entrepreneurs. This study should assist the provincial government and non-
governmental groups or departments with answers to the question about their roles in 
helping the Soweto township entrepreneurial activities. The highlight was to find out 
whether interventions were able to have an effect on township economy revitalisation; 
 To explore the areas in which government and the private sector can intervene to assist 
entrepreneurs, the key focus were issues that affect township entrepreneurship 
development and challenges that hinders the growth of township economy. This will 
also help to highlight barriers and challenges hampering the growth and development; 
 To identify monitoring and instruments that check the outcomes of this project 
achievements;  
 To Identify effectiveness of policies and strategies that promotes economic 
development or activities in the townships and taking their small businesses to another 
high level that generate broader economic benefits; and   
 To examine through the case study that township economy creates jobs as proclaimed 
or supported by different existing research work on the concept of SME’s. 
 
1.5 SCOPE OF STUDY 
 
1.5.1 Field of study 
 
The purpose of this research study was to outline results of entrepreneurial activities coming 
out from the role of supporting and stimulating the township economy. The case study objective 
6 
 
was based on outcomes of supporting and stimulation of the township economy and informal 
sector. For every input from any interventions, there is supposed to be expected results of 
delivery, achieving the intended purpose and corrective actions when there are deviations. The 
study helps to highlight results and also challenges in the revitalisation of township economy 
from creation of stable township enterprises and employment through township entrepreneurial 
activities. The review of the literature and observations are done through participant 
observation research. 
 
1.5.2 Geographical 
 
This study was based on entrepreneurial activities within the informal sector and limited to the 
community of Soweto Township. Soweto is an urban settlement or township located southwest 
of Johannesburg with a population estimated at 1.48 million from the census conducted in 2016 
(StatsSA, 2016). Soweto falls under the Greater Johannesburg Metropolitan Municipality in 
the Gauteng Province with an estimated population of 4.434 million as from community survey 
of 2016 (StatsSA, 2016:15). Soweto falls and demarcated under the Region D as an area of the 
Greater Johannesburg Metropolitan Municipality. Soweto as a name stands for South-Western 
Townships as it incorporates many townships. Its western periphery forms the furthest 
boundary of the City of Johannesburg. Gauteng Province is the smallest province with 
inhabitants around 14, 7 million people, which floods from other provinces and the rest of 
Africa to look for economic opportunities in this province (StatsSA, 2017:2).  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7 
 
Figure 1.1: The Map showing the Soweto Township 
 
Source: Map showing the location of Soweto (www.sa-venues.com/maps/atlas/gau_soweto.gif) 
 
1.6 RESEARCH METHOD 
 
This research, pertaining to the specific objectives, consists of two phases of literature review 
and an empirical study.  
 
1.6.1 Phase A: Literature review/theoritical review 
 
Theoretical framework was determined to support the academic argument regarding 
entrepreneurship in the townships within the context of this study. Considering current, 
previous research and other alternative research used to investigate any economic development 
8 
 
of township settlements through entrepreneurship, informal economy, informal sector and job 
creation.  Among other things, the articles from databases and journals were used to effectively 
deal with issues relating to entrepreneurship. Sources consulted included:  
 Scientific journals.  
 Google scholar and other internet searches. 
 Published Books and Theses. 
 Previous research studies on entrepreneurship. 
 Statistical reports from Statistics South Africa. 
 Reports from the Gauteng Department of Economic Development 
 
Primary data targeting group in their businesses locations was collected and were also 
formulated as to receive independent responses from respondents The measuring instrument 
used was a questionnaire survey that was designed to gather information from township 
entrepreneurs in relation to the case study problem statement.  It was also used to serve as a 
measure on whether entrepreneurship and role support of township entrepreneurs, contributes 
meaningfully in addressing challenges that are found to be obstacles in the growth of township 
economy and employment creation by it.  Some of the quantitative data was supported by 
qualitative data where information was workable. The analysis will focus on benefits that are 
visible in terms of impact, value, progress and the main challenges facing the township 
economy including SME’s progress within the townships.     
 
1.6.2 Phase B: Empirical study 
 
The empirical study consists of the research design, respondents, measuring instrument and 
statistical data analysis where applicable.  The measuring instrument used was a questionnaire 
survey that was designed to gather information from township entrepreneurs in relation to the 
case study problem statement.  It was also used to serve as a measure on whether 
entrepreneurship and role support of township entrepreneurs, contributes meaningfully in 
addressing challenges that are found to be obstacles in the growth of township economy and 
employment creation by it.  Some of the quantitative data was supported by qualitative data 
where information was workable. The analysis will focus on benefits that are visible in terms 
of impact, value, progress and the main challenges facing the township economy including 
SME’s progress within the townships.    
  
9 
 
1.6.2.1 Research type design 
 
The questionnaire was designed based on the important issues identified in the literature 
review. The research approach for data collected for this case study was a quantitative research 
design with a cross-sectional approach to evaluate township entrepreneurs’ responses and 
perceptions to issues related to their entrepreneurial challenges and decisions based on the role 
of support and interventions by external stakeholders. Creswell (2009:22) noted that using 
criterion sampling is useful for quality assurance.  Focus was on getting responses on the 
themes of entrepreneurship within this sector, access to capital, access to market, skills, role of 
support from any group which is government or private, the incubators and as well as enterprise 
development. 
 
1.6.2.2 Population/sampling 
 
The sampling method to be used in the research will compose of structured questionnaires.  
The first step was to select the sample of township entrepreneurs that will form the study 
population.  The sample size was limited to the township entrepreneurs of Soweto as in the 
Gauteng Province.  Township entrepreneurs selected were briefed on the questionnaire 
contents information in order to eliminate or reduce errors.  Participants will complete a set of 
questionnaires, participation will be voluntary and participants’ information obtained will be 
treated confidential and the case study results will be used for research purpose only.  The 
researcher will explain to the participants or respondents the reason behind this survey or 
research and how the information gathered will be treated, as this will give permission to 
continue with the questionnaires or survey to avoid discomfort to the participants. 
The empirical study consists of an instrument used as in a form of a questionnaire and was 
developed at the North-West University School of Business and Governance.  The 
questionnaire was divided into five setion as:  
 
 Section A: Personal information 
 Developed to gather information from the respective respondent regarding their 
profile and characteristics and to help us with the statistical information analysis 
of the data for comparisons among different businesses. 
 
 Section B: Business Information 
10 
 
 Developed to source and measure the characteristics of township entrepreneur-
owned business.  
 
 Section C: Motivational Factors 
 Developed to measure motivational factors for the purpose to determine which 
factors drove entrepreneurs to enter into their own business ventures or to start 
a business. 
 
 Section D: Obstacles Faced by Entrepreneurs 
 Developed to measure the barriers factors as well as challenges that are faced 
by township entrepreneurs in starting-up and running currently their own 
business ventures better and successfully. 
 
 Section E: Financing Needs of Entrepreneurs 
 Developed to determine the training and financial development needs of 
entrepreneurs who were involve on this research survey. 
 
1.6.2.3 Data analysis and interpretation 
 
All information and notes taken from the process of gathering information from the 
entrepreneurial community of Soweto were subjected to this process of analysis and 
interpretation. Descriptive statistics and the appropriate inferential statistics was used to derive 
meaning from the data. The Special Package of Social Science (SPSS Inc.) 2015 IBM SPSS® 
Statistics Version 25 technology was applied in this process together with Microsoft Excel. 
The graphs were also utilised to interpret the results obtained from the survey. 
 
1.6.2.4 Data collection 
 
For data gathering tool, the study used structured questionnaire survey for data collection to all 
the respondents that participated in the study and will be distributed to the local business 
owners in Soweto. Questionnaires will be either personal delivered to the business owners’ 
physical addresses or e-mailed and sufficient time will be allowed for participants to properly 
complete questionnaires. The respondent will be assisted so that the questions are understood 
and correctly when clarity is required. Other information was sources from previous researched 
11 
 
information, the provincial government data and other non-governmental groups as part that 
supports the case study. 
 
1.6.2.5 Reliability & validity 
 
The study will be based on empirical investigation and on real-life situation of entrepreneurs’ 
business activities, and also based on perception, opinions and experience of individuals as 
participants. The research approach and data collection is based on township business owners’ 
opinions, feelings, and experiences and cannot introduce treatments or manipulation by 
government stakeholders as they seek to control outcomes of respondent answers. Organised 
data are with the aim of formulating general themes and link them together to create an 
explicitly explanation of the prime theme for this study. Cronbach's alpha coefficient has been 
used, which recommends a value between 0.7 and 0.8 for the reliability and consistency of any 
items (Pallant, 2013:47). 
 
1.6.2.6 Ethical consideration 
 
In the field of research there are very critical vital ethical considerations and are mainly 
plagiarism and manipulation of information. Requirements from participants were discussed 
with their rights and risks that might be encountered including benefits to participants. 
Throughout the study the following will be ensured: 
 Clarify the aim and study objectives and follow the procedures with all the 
respondents upfront. 
 Inform respondents that participating in this survey is voluntary. 
 That all participants’ privacy will be respected at all time and that everything 
shared will be treated as confidential. 
 
1.7 LIMITATIONS 
 
Research design aims is to respond to the research questions as outlined in the research problem 
statement for this survey.  The unit of analysis for this study aims for a descriptive analysis that 
is limited to one selected township in Gauteng province, as SOWETO. The review has 
identified the limitations to this study as follows: 
12 
 
 It’s evident that some of the participant to the survey may experience some difficulties 
in completing questionnaire and assistance may be required to prevent any errors or 
misleading information from other person than the intended respondent;  
 logistical issues will require a lot of travelling to visit entrepreneurs’ businesses; 
 not all participants to this survey respond to questionnaires honestly; 
 the willingness to participate to the case study may be challenging; and 
 anticipated level of education of some participants. 
 
1.8 THE STUDY LAYOUT 
 
This study layout comprises of five chapters themes and the chapters in the mini-dissertation 
are presented as follows: 
 
Chapter 1: Introduction and problem statement 
 
The first chapter will cover the orientation and the problem statement where the chapter 
discusses the background, research questions, problem statement, extent of the study, research 
methodology and the overview of the research design and the layout summary of the next 
chapters. 
 
Chapter 2: Literature review and empirical study 
 
The second chapter will be having literature reviewed and empirical study on the issues of 
entrepreneurial concept, township economy and informal sector.  It will also focus on the 
concepts that previously were researched as topics that support the research problem statement. 
 
Chapter 3: Research methodology 
 
The third chapter covers the details of the research methodology that the researcher will be 
using to carry out the study. 
 
Chapter 4: Results and discussion of empirical study 
 
13 
 
The fourth chapter will contain the data presentation and analysis of results, while the fifth 
chapter will cover the summary, conclusion on the results findings. 
 
Chapter 5: Summary and the study Conclusions 
The fifth chapter will also look and made comparable of cases studied done in different 
locations based on experience and outcomes and comparing some learning and improvements 
approaches.  Recommendations will be summarised.  
14 
 
CHAPTER 2 
LITERATURE STUDY OF ENTREPRENEURSHIP 
 
2.1 INTRODUCTION 
 
The main purpose for this research case study is to investigate two aspects of role supporting 
and stimulating township economy and informal sector in Gauteng townships. 
Entrepreneurship is recognised to be a vehicle of sustainable economic growth through job 
creation, innovation and its welfare effect (Herrington et al., 2014:25). According to Strydom 
(2015:464) the majority of township formal businesses from the research work studies, proves 
that majority of those formal businesses were located in small, formal neighborhood centres 
and the majority of them are small retailers. The township economy can be regarded as part of 
entrepreneurship activities in the township business environment. Global, entrepreneurship is 
recognised as a driver for economic growth and is generally focused as an action-oriented 
phenomenon with immense creativity and innovativeness that ranges from opportunity or 
necessity entrepreneurship (Mokaya et al., 2012:128).  
 
This chapter is going to explore what township economy is, what entrepreneurial activities 
associated with the economy and then expand on the theoretical framework which elaborates 
on the challenges and role of supporting township entrepreneurship as a concept.  The purpose 
of this study is to provide answers to some of the critical concerns and uncertainties raised by 
informal business and inhabitants in the township economy.  The township economic growth 
in South Africa has been progressing at a snail pace as there are so many constraints that affect 
its progress.  South Africa can no longer solely depend on the government or large public or 
private organisations to create jobs and must shift the emphasis towards small and medium 
enterprises to stimulate job creation (Herrington et al, 2014:25).  
 
Entrepreneurship activities in South Africa continue to be challenged in many areas including 
the lack of financial support from financial institutions (Fatoki & Van Aardt Smit, 2011:1414; 
Kerr, 2009:88).  The study focuses on the challenges facing township entrepreneurs in their 
entrepreneurial activities while investigating the role of support from the external stakeholders 
as they seek to overcome barriers that affect township entrepreneurship.  Activities based on 
enterprises and markets in the township are referred as the concept of ‘Township economy’ 
(Basardien et al., 2014:46).  
15 
 
 
Charman (2016:1) the idea that in South Africa township economy need to be revitalised has 
re-gain its significant momentum from politician and for a while it had seemed as though, the 
informal economy and small business enterprises had been dropped off the developmental 
radar with the country’s strategically National Development Plan focusing only on creation of 
jobs within the formal economy sector.  
 
According to Malony (quoted by Charman, Petersen et al., 2015:1), “informal economy” 
contributes to employment in marginalised communities both through business generation but 
also through the transfer of skills and experience to informal workers.  According to Basardien 
et al. (2014:46) “informal trading” relates to unregistered activities in the economy and also 
known or mentioned as the informal economy that will contribute to the Gross Domestic 
Product value, calculated or observed. 
 
The study focuses on “entrepreneurship” and its challenges within the context of townships 
economy in South Africa and also investigates the role of entrepreneurial support in this 
environment.  The empirical study conducted in the township of Soweto will reveal challenges 
affecting entrepreneurial activities in this environment and the role of supporting and 
stimulating township businesses as a way of sustainable township economies developments.  
In the context of investigating entrepreneurship in the informal sector, the situation in the 
township of Soweto in regard to unemployment, entrepreneurial activities and government 
interventions was examined as part of literature review study. 
 
2.2 EVOLUTION OF ENTREPRENEURSHIP AND ITS THEORIES 
 
By varying and assessing both habits and routines, the entrepreneurial process founders 
continually adapt to changes in the external world (Breslin, 2011:3).  In some instances, this 
might result in new heuristics or means-ends relationships being created in response to a 
changing world or indeed in anticipation of a changing world (Gartner, 1989; Kirzner, 1997; 
Shane and Venkataraman, 2000) as quoted by Breslin (2011:3).  At a micro-level the 
entrepreneur selects particular habits and routines when completing key entrepreneurial 
activities.  However, choices made by the entrepreneur during the selection of habits and 
routines are complicated by a number of factors, including the misinterpretation of 
environmental feedback as a result of cognitive bias, where positive outcomes are attributed to 
16 
 
the actions of the entrepreneur and negative outcomes to external factors beyond their control 
(Baron, 1998; Busenitz & Barney, 1997) as quoted by Breslin (2011:4).  
 
As Loasby (2007) argues ‘entrepreneurship defies routine; but it requires routine and results in 
routine’ and a failure to achieve a balance between routinisation and creativity, is a major 
difficulty which few entrepreneurial ventures overcome (Loasby, 2007:1104). 
 
Richard Cantillon as quoted by Chimucheka et al. (2014:160), developed one of the early 
theories of entrepreneurship in 1725 focused on the individual involved in an enterprise and 
defined the entrepreneur as an individual who assumes risk, by buying at a certain price and 
selling at an uncertain price. Timmons and Spinelli (2009:47) defined entrepreneurship as, ‘a 
way of thinking, reasoning and acting that is opportunity obsessed, holistic in approach and 
leadership balanced for the purpose of value creation and capture’. According to Hisrich and 
Peters (2002) and Makhoba (2010:9) (cited by Matli et al. 2016:128), entrepreneurship refers 
to a procedure that involves, “creating something new with value by devoting the necessary 
time and effort, assuming the accompanying financial, psychological and social risks and 
receiving the monetary rewards as well as personal satisfaction and independence”. 
 
According to Sobel (2011:39) an entrepreneur organised, managed and assumed the risks of a 
business venture.  According to Swanepoel et al. (2010:66) entrepreneurship is a continuously 
changing process of vision, change and creation and it requires an application of energy and 
passion towards the creative solution on implementing new ideas and solutions. According to 
Makhoba (2010:17) the South Africa’s high unemployment rate requires other different means 
of fighting the epidemic of unemployment, so that opportunities will be created through higher 
levels of entrepreneurial activities and the creation of SMME to reverse this adverse.  
 
According to Bosma and Levie (2010:11) as quoted on the research of Agbenyengah (2013:28) 
they summarised the concept of entrepreneurship as follows: 
 The general impact of entrepreneurship on a developmental project is likely to show 
signs of dissimilarities in each phase regarding time frame and actual size; 
 entrepreneurship serves as essential tool in every phase of the economic development; 
and 
 policy makers have stressed the basic requirements of efficiency enhancement 
innovation machinery yet entrepreneurship serves as the primary tool of development. 
 
17 
 
According to Swanepoel et al. (2010:63) as quoted from Kuratko and Hodgetts (2004:30) on 
defining entrepreneurship as an evolving concept, developed an integrated definition that 
acknowledges the critical factors needed for this phenomenon, including the cognitive scripts 
of arrangements, willingness’s and ability. According to the quote, entrepreneurship is a 
dynamic process of vision, change and creation and it requires an application of energy and 
passion towards the creation and implementation of new ideas and creative solutions.  Essential 
ingredients include: 
 the willingness to take calculated risks and in terms of time, equity, or career; the ability 
to formulate an effective venture team;  
 the creative skill to marshal needed resources; the fundamental skill of building a solid 
business plan; and  
  finally, the vision to recognise opportunity where others see chaos, contradiction, and 
confusion. 
 
According to Rostow (1960), as quoted by Acs et al. (2010:3) there are five stages of economic 
and entrepreneurship and suggested that all countries go through these five stages of economic 
growth:  
 The traditional society  
 The preconditions for take-off  
 The take-off  
 The drive to maturity and  
 The age of high mass-consumption.  
 
While these stages are a simplified way of looking at the development of modern economies, 
they identify critical events (Acs et al., 2010:3). Michael Porter (2002) has provided a modern 
rendition of this approach by identifying three stages of development: (1) a factor-driven stage, 
(2) an efficiency-driven stage and (3) an innovation-driven stage (Acs et al., 2010:4). 
 
The factor-driven stage is marked by high rates of agricultural self-employment stage (Acs et 
al., 2010:4). Almost all economies experience this stage of economic development (Acs et al., 
2010:4). These countries neither create knowledge for innovation nor use knowledge for 
exporting (Acs et al., 2010:4). To move into the second stage, the efficiency-driven stage, 
countries must increase their production efficiency and educate the workforce to be able to 
adapt in the subsequent technological development phase: the preconditions for take-off plays 
18 
 
a crucial role (Acs et al., 2010:4). The drive to efficiency describes the first transition that is 
predominantly institutional in nature (Acs et al., 2010:4). 
 
To compete in the efficiency-driven stage, countries must have efficient productive practices 
in large markets, which allow companies to exploit economies of scale. Industries in this stage 
are manufacturers that provide basic goods and services Acs et al., 2010:4). In the efficiency-
driven economy capital and labour play a crucial role in productivity and the focus is on 
technology, in the decision making process (Acs et al., 2010:4). For over a century there has 
been a trend in economic activity exhibited in virtually every developing country toward larger 
firms (Acs et al., 2010:4). 
 
Figure 2.1: Entrepreneurship and the corresponding stages of developed. 
 
Source: The GEDI graph (2010:7) (Acs et al., 2010:5) 
 
According to Baumol (1990) on Figure 2.1, the intersection of the curve on the vertical axis 
suggests that entrepreneurship is also a resource and that all societies have some amount of 
economic activity but that activity is distributed between productive, unproductive and 
destructive entrepreneurship (Acs et al., 2010:5). 
 
2.3 THE VIABILITY OF INFORMAL BUSINESS OWNER ACTIVITIES 
 
According to André et al. (2010:1) in analysing South Africa‘s entrepreneurial developments, 
there is substantial micro-enterprise or small business sector that offers various and vibrant 
setting for analyses. The expanding and small firms will play a vital role in more job creation 
19 
 
as they will become prominent generating a majority of new employment opportunities 
(National Development Plan, 2011:140). Micro-enteprise has a potential in all endevours to 
create employment and generate income (André et al., 2010:2). Developmental approach as 
promotion to small business under developing countries, its original objectives is the creation 
of vaiable enterprises economically and enterprises that can survive without perpetual subsidy 
and contribute to the growth of income and also to better living standards (Staley et al., 
1965:318) as quoted by André et al. (2010:2). 
 
According to De Soto (1986) as quoted by Ligthelm et al. (2010:8) there are different range of 
activities that the informal sector encompasses in South Africa, the largest concentration are in 
retail including spaza shops, hawkers, and shebeens and there are no accurate records of these 
businesses and most of them are also not available from any official sources. 
 
Rogerson (1997:337) as quoted by Berner et al. (2012:383) it is possible, nevertheless, to 
delineate two central categories of informal business: survivalist and entrepreneurial and on 
the one hand, survivalist businesses generate minimal income while owners wait for formal 
sector job opportunities. On the other hand, a select group builds lasting businesses, making 
capital improvement for example, and has the potential to flourish.  
 
Table 2.1: Different types of entrepreneur definitions 
Type of entrepreneur Definition 
Survivalist  A survivalist entrepreneur is often associated 
with the informal sector and is a person who 
is forced into entrepreneurship due to 
circumstances.  
Lifestyle entrepreneurs  Lifestyle entrepreneurs are people who open 
up businesses as hobby or to maintain a 
certain lifestyle. 
High growth entrepreneurs  These entrepreneurs are able to generate 
profits quickly, which enable them to create 
a bulk of new jobs. 
Source: Constable (2015) 
 
2.4 THE TOWNSHIP ENTREPRENEURSHIP 
 
The township can be described as previously environment that is not well developed living 
areas in the urban environment (Jordaan et al, 2016:127).  According to Matli et al (2016:126) 
20 
 
the current Township Economy Revitalisation (TER) campaign includes increasing the 
engagement and success of township entrepreneurs to involve themselves in their township 
economy activities. It is necessary to force a continuous process that will drive innovative 
sustainable development in the townships. According to Matli et al. (2016:130) government 
and private sector need to invest seriously in township revitilisation for growing the economy 
within the townships environment.  
 
Education and training is regarded as the one of the conditions that are the weakest in terms of 
entrepreneurial conditions according to the Entrepreneurship Monitor report in South Africa 
(Herrington & Kew, 2015/16:7). In the towship, it is difficult to secure funding for 
entrepreneurs because of their low credit status (Makhoba, 2010:41). The government and 
small business perceive that agencies and non-financial and financial institutions, do not meet 
the needs of the small business sector (Phillips et al., 2014:88).  
 
The low credit score of township entrepreneurs seems to be a challenge in securing funding 
(Makhoba, 2010:41). According to Smit et al. (2012:6326) there is a lack of access to credit by 
emerging African SME entrepreneurs, majority depends on personal savings or loans from 
other people, as their source of start-up capital. Entrepreneurs in townships are faced with 
numerous basic challenges that includes the support from community they serve, getting hold 
to the right information and receiving mentorships from other successful entrepreneurs within 
their communities (Matli & Jordaan, 2016:128). 
 
Table 2.2: Summarised Township Economic Revitalisation Strategy by Gauteng 
Provincial Government. 
Key Focus Areas Brief Definition 
Making sure of regulatory 
and legal framework 
It seeks to review and revise the regulatory and legal framework 
applicable to small businesses in order to increase the growth and 
sustainability of these businesses.  It focuses on provincial and 
municipal regulations which place both a time and monetary burden 
on small businesses and may therefore potentially discourage 
informal businesses from growing and registering as formal 
businesses. 
 
Promoting manufacturing 
and productive activities. 
Aimed at providing training, technical assistance and project support 
to township businesses active in the manufacturing sector, thus 
increasing the level of local content in the market and decreasing the 
dominant position of larger and established suppliers. 
21 
 
Infrastructure supporting 
the enterprise 
development. 
About the provision of different kinds of specialised economic 
infrastructure to township businesses.  This should have the impact 
of reducing the cost of doing business as well as increasing linkages 
and co-operation between township businesses.  It also focuses on 
the province wide and comprehensive roll-out of the Gauteng 
Broadband Network (GBN) in business hotspots in the townships as 
well as the establishment of industrial parks, business hubs and 
incubators and the provision of management, administrative and 
technical support. 
Promoting 
entrepreneurship 
development in the 
township. 
Focuses on the expansion of training and workplace programmes in 
townships, thus increasing the total number of entrepreneurs and 
employment opportunities in the township economy.  Examples of 
specific programmes under this KFA include the Tshepo 500,000 
initiative and collaboration with SETAs, FETs and state-owned 
enterprises to produce artisans and apprenticeships within 
townships.  The figure below summarises the specific actions in the 
TER needed to achieve this change objective. 
Financing and Investing 
in the Township 
Economy. 
Focuses on addressing the difficulties experienced by township 
businesses in accessing external finance and the need to bring 
additional and new forms of finance into the Township Economy. 
Specifically, the strategy identifies the need to re-capitalise and 
strengthen the Gauteng Enterprise Propeller (GEP); investigate the 
establishment of a state-owned bank; Township Economy Bond or 
Solidarity Fund; and develop and formalise co-operative banks and 
insurance enterprises.  Together, these initiatives are expected 
enhance financial access for businesses and residents throughout the 
Township Economy. 
Ensuring Access to 
Markets. 
About the use of government procurement as an instrument to 
support the growth or creation of Township Businesses as well as the 
potential role of community markets and clusters in deepening 
linkages between producers and sellers with and outside of the 
Township Economy.  This KFA therefore addresses the ability of 
Township Businesses to obtain improved access to government and 
corporate markets through revised procurement procedures.  This, in 
turn would generate a higher level of local content within the 
Township Economy and stronger linkages with mainstream markets. 
Promotion of Innovation 
and Indigenous 
Knowledge Systems. 
Focuses on providing support for firms to innovate, protect 
indigenous knowledge and improve the commercialisation of 
products under development will result in more successful 
enterprises in townships.  This is summarised below. 
Understanding the 
Economic and Social 
Value of the Township 
Economy 
Focuses on building research, data and information systems to 
understand the township economy better and to increase the scale of 
interventions and furthermore ensure that the economic actors in the 
township are recognised. 
Source: TER Strategy: Mid-Term Implementation Evaluation report (2016:3) 
  
22 
 
2.5 ROLE OF ENTREPRENEURSHIP IN JOB CREATION  
 
Entrepreneurship is regarded worldwide as an engine required in scaling up the economic, 
reduction of economic challenges such as poverty and joblessness and it is undoubtable of a 
relationship that is there between the economic growth and entrepreneurship levels for any 
nation (Chimucheka et al., 2014:160).  According to Herrington et al. (2012:10) entrepreneurs 
has a contribution in the global economy in creation and development of new jobs and growing 
businesses.  The entrepreneurial sector is well recognised as a significant employer.  For a 
critical driver of job creation and growth, the governments look to entrepreneurship as a 
solution (Chinomona & Maziriri, 2015:836).  
 
According to Mc Camel (2018:13) quoting Lauterbach (1997:283) the employment concept 
involves activities that are compensated financially and are considered to have a positive direct 
or indirect effect on labour productivity within economic sectors generating employment. 
According to Wright et al. (2015:5) quoting from McMullen and Warnick there are several 
things that entrepreneurs have introduced as technologies that produce many new industries, 
creating jobs and improving socio-economic conditions different nations.   
 
South Africa has recognised in socio-economic re-address, another tool in overcoming 
challenges by developing entrepreneurs (Phillips et al., 2014:85). In all efforts in rebuilding 
and readdressing our economy situation, poverty continues, unemployment remains high and 
inequality gap widens. Proxies to measure the dimensions in “entrepreneurship” need to be 
used and are defined as innovation, risk-taking and identifying markets (Faggian et al., 2015:2). 
 
2.6 A BROADER DEFINITION OF TOWNSHIP AND ITS ECONOMIES 
 
The term ‘township’ is a legal term that refers to a formally promulgated urban area (Karuri-
Sebina et al., 2014:10).  According to Karuri-Sebina, McGallin and Napier (2014:11) many 
commendable state interventions have sought to address the high levels of destitution and 
joblessness in townships as well as their segregated nature. When the necessary basics of an 
economy are not there, whatever attempts to grow or support township economy will have a 
slim chance to survive (Karuri-Sebina et al., 2014:8). The key question is whether 
socioeconomic problems in a township can be addressed by intervening within township 
economies or by improving the access of township residents to opportunities outside these areas 
(Karuri-Sebina et al., 2014:9).  
23 
 
 
Therefore, township economies depend on the state of the economies of the cities and towns to 
which they are linked and the provincial, national and global economies status (McGaffin et 
al., 2015:19). In fact, townships are rich with economic vitality and often have varied informal 
businesses in public areas as well as private household spaces.  
 
According to Karuri-Sebina, McGallin and Napier (2014:11) the township environment has 
common characteristics as follows: 
 Most township economies still currently serve the dual purpose of providing cheap 
labour to established nodes and cities and of absorbing growing numbers of ‘surplus’ 
labour; 
 they are often relatively poorly located and are spatially disadvantaged in terms of 
facilitating economic activity and accessing other economic nodes and job 
opportunities; and 
 they generally have a disproportionate concentration of lower income households and 
lower skills levels. 
 
Mahajan (2014:55) describes a conceptual framework for the township economy as an informal 
traditional economy exists almost entirely in townships and informal settlements, characterised 
by low productivity, very low capital intensity and unreliable or no electricity connection; lacks 
its own transport; relying on expensive private commercial transport facilities; has limited use 
of technology (cell phone mostly); lacks bank accounts and access to formal credit; offering 
only membership in informal savings clubs; largely comprises household-sector enterprises 
(with not more than one or two paid workers); has proprietors likely to have less than a high 
school education who, if given a choice, would pick stable salaried employment in the formal 
sector; has a fair number of owners who are foreign nationals without formal documentation; 
lacks a downstream connection with the formal advanced economy while trading in products 
largely manufactured in the formal advanced economy; and predominantly features street 
vending and other small-scale retail sales operations, personal services (hair salons) and 
artisanal production. 
 
The township informal economy is concentrated on with the retail trade in food, consumable 
groceries and drink, where else youth entrepreneurs have more interest (and aptitude) for the 
service sectors (Charman, 2017:2). In South Africa, the lifestyle and leisure sectors contain 
some of the most promising youth start-ups (Charman, 2017:2). Davies and Thurlow (2009:3) 
24 
 
developed a study of categories based between interactions of formal and informal sector and 
below are four types of that informal activities as:  
 Informal producers who compete with formal producers in product markets;  
 informal traders who sell formal sector products and charge a fixed transaction cost 
margin;  
 workers who are informally employed in producing formal sector products; and  
 informally employed workers producing goods and services that are not produced 
by the formal sector (i.e., non-competitive producers).  
 
2.7 THEORETICAL FRAMEWORK FOR TOWNSHIP ECONOMY 
 
The South Africa’s township economy has its desired objective of a job creation and a rapidly 
growth as mentioned in the South African master plan as the National Development Plan 
(2012) but challenges are its low developments, weak linkages with the formal sector and the 
negligible industrial production within the township borders (Mahajan, 2014:51).  The dual 
economic model analysis as developed by the economist Arthur Lewis (1954) in his seminal 
paper, “Economic Development with Unlimited Supplies of Labour”, he included, a “Capitalist 
Sector” the modern, rapidly industrialising part of the economy with a narrow interest in 
capturing capital, knowledge and new ideas; and, the “Subsistence Sector” representing a 
traditional, unproductive, static part of the economy so inundated with surplus unskilled labour 
that the marginal productivity of labour had been driven down to zero, or even negative levels 
in some situations much lower, in any case, than in the modern economy (Mahajan, 2014:52).  
 
The “Substance Sector” (traditional sector) has a virtually unlimited supply of unskilled labour 
waiting to be tapped by the growing modern sector (Capitalist Sector) that required the 
unskilled labour at the market wage price as mentioned by Lewis.  According to Lewis (1954) 
as quoted by Mahajan (2014:53) the development process in the Lewis model therefore 
unambiguously viewed the modern sector as the dominant engine of economic growth; there 
was little scope for the traditional or informal sector to play a significant part.  The binding 
constraint to the economic expansion process became the availability of capital and natural 
resources because labour was readily and cheaply available at any given wage price.  The key, 
according to Lewis, was “the use which is make of the capitalist surplus.  In so far as this is 
reinvested in creating new capital, the capitalist sector expands, taking more people into 
capitalist employment out of the subsistence sector.  The surplus is then larger still, capital 
25 
 
formation is still greater and so the process continues until the labour surplus disappears” 
(Lewis 1954). 
 
According to Mahajan (2014:53) the Lewis’s conclusions are significant for South Africa’s 
dual economy structure and troubling.  If the fate of the country’s employment generation and 
shared prosperity hangs mostly on the growth potential of its modern sector, then that by itself 
cannot be very encouraging news.  It will surely be difficult to tackle unemployment in the 
range of 25 percent, most of it structural and involving unskilled workers, on the back of an 
economic sector that is incapable of growing faster than 3 to 4 percent a year on a sustained 
basis (Mahajan, 2014:53). 
 
2.8 SOUTH AFRICA UNEMPLOYMENT AND ECONOMY ISSUES 
 
South Africa moving to democracy has dealt with many labour hindrances that impeded on 
economy growth moving forward and open up labour markets. Verick (2012:376) explains that 
the impact of the crisis on the South African labour market was multifaceted as it saw a total 
of 900 000 job losses for that period of 2008/9.  
 
The Table 2.3 provides overview summary creation of South Africa employment and its 
variation growth during the year 1995 to 2016 (StatsSA, 2017b).  
 
Table 2.3: South Africa employment and its variation growth for 1995 – 2016 
Year  Number of 
employed 
people  
Year on year 
change in 
employment  
Number of 
people 
unemployed  
Year on year change 
in unemployment  
1995  8 069 000  1.2%  1 644 000  -17.3%  
2000  11 880 000  14.6%  4 333 000  37.2%  
2006  13 237 000  5.9%  3 984 000  -0.2%  
2010  13 061 000  -2.3%  4 401 000  6.7%  
2016  16 069 000  0.3%  5 781 000  11.3%  
Source: Holborn (2012); Stats SA (2017b) 
 
26 
 
There are so many explanations from researches about defining informal employment and also 
informal economy as an issue in the country’s economy. Informal employment has been 
described as a precarious employment environment and the informal economy includes variety 
of different types of employment (Willemse, 2011:7)). Statistics South Africa describes 
informal employees as those employees who do not have a written contract of employment, 
are not registered for income tax or value-added tax and do not receive basic benefits such as 
pensions or medical aid contributions from their employers (StatsSA, 2011:XVII).  The South 
African economy growth pace is stagnant and growing slowly and experiences high poverty 
especially in rural areas (Jiyane et al., 2013:6). According to Bianchi (2012:277) self-
employment can be a solution to unemployment.  
 
Manyaka-Boshielo (2017:1) explained that as early as in 1995, Trevor Manuel, former Minister 
of Trade and Industry, identified unemployment as one of the major problems facing the new 
regime.  Manyaka-Boshielo (2017:1) the minister addressed the important mitigating role of 
entrepreneurship when he said ‘small, medium and micro enterprise is an important transport 
to address the employment creation challenges, economic rise and equity in our country’.  
 
The three constraints of poverty, inequality and unemployment for South Africa have been 
identified as the most vicious constraints to economic development and economic participation 
of individuals and the gap between the have and have not, is widening (Parliament of the 
Republic of South Africa, 1994). For economic simulation SME’s are expected to be play a 
vital role to address obstacles that hinders job creation, sustainable economic growth and 
matters of equitable distribution of income (Fatoki, 2014:922). 
 
Statistics South Africa announced that unemployment fell by 330 thousand to 5.88 million 
people and unemployment rate decrease to 26.7 percent on the fourth quarter of 2017 from the 
Labour Force Survey (StatsSA, 2017). Herrington and Kew (2016:5) explained in 2015 that 
TEA rate had regained some ground, from 7 to 9.2 percent in 2014 to 2015 respectively. In 
2013 and 2014, approximately 85 percent of South African early-stage entrepreneurs were 
black Africans, but in 2015, this figure had declined by a fifth, to 68 percent (Herrington & 
Kew 2016:5). According to the Statistics South Africa unemployment in metros comparison, 
Gauteng metros are the highest amongst other countries’ provincial metros and this can be 
attributed from high unemployment in the townships, informal settlements and peri-urban 
residential of the province (StatsSA, 2014).  
 
27 
 
Unemployment levels in the youth of South African is very  high and total unemployment rate 
has progressively gone up and at 26.7 percent, and the youth unemployment levels at 
54.5percent (StatsSA, 2016:29). From the case study published under the study of South 
African Township Economies and Commercial Property Markets, the study concluded that 
despite of many attempts that the state has intervened in addressing the high levels of 
destitution and joblessness in townships, the impact of support has been limited due to the 
required fundamentals of an economy that are missing (McGaffin et al., 2015:39). 
 
2.8.1 Youth unemployment from a South African perspective 
 
Manyaka-Boshielo (2017:1) described South Africa as a country where poverty levels are very 
high and unacceptable and in particular the youth unemployment.  In 2015, 3.6 million young 
people (between 35 and 37 percent of this demographic) were unemployed and were actively 
looking for a job (Herrington et al., 2016:34). The stats reveal that there were slightly above 
ten million people aged 15 to 24 years in 2018 second quarter who are unemployed (StatsSA, 
2018:11).  Between second quarter of 2017 and 2018, young person between age 15 to 24 years 
were jobless, no education or training and were estimated around 3.3 million (StatsSA, 
2018:11). 
 
2.8.2 Global Entrepreneurship Monitor (GEM) reports and job creation 
 
According to Herrington and Kew as quoted by Malebana et al. (2015:91) from the 2013 
Global Entrepreneurship Monitor (GEM) study, South Africa’s total entrepreneurial activity 
and the country is now ranked position thirty five on sixty eight countries that participated in 
(GEM) study.  For a business enterprise to succeed and grow, the most important factor is the 
size of its market and growth is constrained by the size of the local market (Karuri-Sebina, 
2014:39). The GEM survey report 2016/2017, indicates that only 15.4 percent of South 
Africans have entrepreneurial intentions and men are more likely to have higher entrepreneurial 
intentions and engage in early-stage entrepreneurial activity than women (Kew et al., 2016:34).  
 
2.9 GENERAL CHALLENGES OF STARTING A BUSINESS IN SOUTH AFRICA 
 
When increasing attractiveness for an entrepreneur’s career and enhancement capabilities to 
start a business, support programmes and education or training could help improve 
28 
 
entrepreneurial activity rates (Malebana et al., 2015:107). It’s difficult to start business without 
the inputs of all stakeholders that includes the government and private sector, and the 
educational limitation affects the entrepreneurs on the capacity to formalise their business and 
the exploitation of new markets (Charman, 2016:2). According to Fatoki (2014:1) the SMME’s 
have a great potential of creation of employment and on the other hand the SMME’s in South 
Africa suffer from high rate of failure. 
 
Former president Thabo Mbeki of South Africa on the state of the parliament address (SOPA, 
2003) mentioned that, “a structural fault in the economy and society has resulted in dual 
economy and society”. “There is a need necessary to build or focus with a strategy that will 
involve building on comparative advantages of the township economy; particularly, abundance 
of cheap, unskilled labour; adjoining land space that is more affordable than the city centres; 
and a potential consumer market that is still untapped” (Singer, 2014:114). 
 
2.10 INSTITUTIONS THAT SUPPORT ENTREPRENEURSHIP 
 
According to Fatoki et al. (736:2010) the support agencies of government such as SEDA which 
help with finance and training to new SMEs need to be rigorously marketed to create 
awareness. The initiatives programmes such as SEDA, Khula, and IDC, all aim to provide 
finance, expansion, growth and competitiveness (Pretorius et al., 2003:519; Page et al., 
2015:44). The mandate is to implement government’s small business strategy, design and 
implement a standard and common national delivery network for small enterprise development 
and integrate government-funded small enterprise support agencies across all tiers of 
government (BER, 2016:6).  
 
2.11 CHALLENGES FACING TOWNSHIP ENTREPRENEURS AND 
GOVERNMENT CONTRIBUTIONS 
 
2.11.1 Government contribution 
 
Charman, (2017:1) in South Africa the intention that the township economy needs to be 
‘reenergised’ has begun to earn significant political grip. According to Manyaka-Boshielo 
(2017:4) quoting Makhura (2015:20) the provincial government of Gauteng has turned its focus 
29 
 
in pulling its resources and emphasis into township transformation and has allocated R300 
million to support township businesses and cooperatives in that year 2015.   
 
Fourie (2015:14) argues that the NDP provides inadequate attention to the ‘unique obstacles 
faced by micro-enterprises in the margins of the economy’. Charman (2017:2) mentioned that 
its objectives in this respect are set out in a strategy document ‘Revitalisation of the Township 
Economy’ (2015).  The strategy details a plan of action through which the government seeks 
to channel resources and create opportunities to foster an inclusive economy based on the 
promotion of manufacturing, support for cooperatives and the growth of opportunities in retail 
and financial services (Charman, 2017:3). 
 
2.11.2 South Africa Incubators 
 
Across all countries, the small business incubators have been identified as strategic tools for 
helping entrepreneurial base to grow while reducing the collapse rate of SMME (Masutha et 
al., 2014:49). Small business incubators to any developed and developing countries have been 
identified as strategic tools for helping to grow a countries entrepreneurial levels while 
reducing the high mortality of SMMEs and governments have supported business incubation 
within various developments contexts working against challenges (Rogerson, 2014:49). In 
South Africa the first business incubator was introduced in the year 1995 through an initiative 
of the Small Business Development Corporation, naming the project "hives of industry" 
(Jooste, 2014:3).  
 
In the year 2013 the trade and industry department as quoted by Rogerson (2014:50), for 
assisting SMME’s to reach maximum heights of growth, business incubators have been 
identified to help SMMEs to become successful.  Incubator services include rent subsidies, 
advisory and administrative services, continuous consulting, business marketing, research and 
development support, training, new technology and subsidised labour (Temtime, 2011:33).  
 
2.11.3 Challenges facing township entrepreneurs 
 
The challenges facing township entrepreneurs are about what occur in their business activities, 
on where people conduct business.  According to Choto et al. (2014:95) entrepreneurs towards 
economic growth and business development, face many challenges on their businesses 
operations. Mahajan (2014:53) explains that the informal modernising sector, in this setting 
30 
 
can either compete with or complement the advanced formal economy. Large retailers 
companies take advantage of the buying power in townships. Obtaining financial support for 
SMEs in developing countries are regarded a very important challenge (SME Insight report, 
2015:15). 
 
2.11.4 Constraints on informal street trading 
 
The informal street traders face four common constraints: economic pressures; sociocultural 
challenges; adverse political conditions and policies; and operational challenges (Tambunan, 
2009:46). According to Southiseng et al. (2010:59) it is harder to keep and sustain the business 
running in comparing with starting-up a business. Willemse (2011:8) explains that ‘Economic 
barriers’ are the primary hindrances people face to successfully enter informal street trading. 
Many people have no alternative but to enter informal street vending because they cannot find 
employment in the formal sector, or they earn insufficient income elsewhere, or they have large 
households to sustain, or a combination of the above (Akinboade, 2005:257; Cohen, 2010:279; 
Fleetwood, 2009:23; Fonchingong, 2005:243; Madichie et al., 2010:305; Onyenechere, 
2009:85; Skinner, 2006:130). 
 
2.12 IMPROVING ENTREPRENEURSHIP ACTIVITIES 
 
Informal economy and micro-enterprises had fallen off the developmental radar for a while, 
with the National Development Plan (2011:115) focusing on job creation in the formal 
economy and must develop a more competitive and diversified economy by raising levels of 
investment, improving skills and human capital formation as well as increasing net exports. 
According to Chinomona et al. (2015:841) referring from Gangata and Matavire the 
government should also provide training to entrepreneurs in areas like financial and strategic 
management, to ensure that they manage properly their entities and the government should start 
on planning about possibility of opening a bank to look upon the needs of entrepreneurs.  
 
2.13 THE INFORMAL SECTOR AS MEANS OF BUSINESS AND SURVIVAL 
 
In the language of economics, trading that is informal is referred to as the informal economy 
and this concept also refers to workers and enterprises that are not registered also not forming 
legal corporation (Appoles et al., 2014:46). Townships population is utilising small-scale 
31 
 
outlets for shopping as grocery stores that provides everyday grocery items needed by 
customers. According to Charman, (2017:2) referring from Mahajan the structure of the 
township economy is dominated by small-scale trade in food and/or consumables, serving 
‘thin’ localised markets with ‘weak effective demand’, whilst the retail sector in general has 
come under increasing competition from supermarkets and large retailers, thus reducing 
opportunities (Mahajan 2014:10). According to Mahajan (2014:10) spaza shops as businesses 
enterprises known are located in every corner of the townships and informal settlements. 
 
Both forms of retail trade tend to be inwardly focused, supplying the surrounding communities 
(McGaffin et al., 2014:19). According to Ntombela (2016:40) the informal businesses in 
townships have the tendency to market their goods and services within townships and this 
limits their growth potential and does little to contribute to the expansion of their tax base and 
the overall need to restructure their economic base. The spaza market although is dominated 
by foreigners who migrated on our shores and are dominating the spaza market business 
(Charman et al., 2015:16).  
 
2.14 SOUTH AFRICA SMME’s SECTOR 
 
The latest Global Entrepreneurship Monitor survey report for 2016/2017 indicates SMME’s in 
South Africa contributes 36 percent to gross domestic product.  In the eight United Nations 
Sustainable Developments Goal (SDG) on entrepreneurship, it was mentioned that 
entrepreneurs do create new ventures and also new businesses creates employments, intensifies 
competition and creation of jobs may directly into increase the levels of economic growth 
(Momani, 2017:10). In Gauteng alone there are 676831 number of SMEs (SEDA, 2016:13). 
 
According to Nicolaides (2011:1044) South Africa is estimated to have approximately 2 
million small and medium business enterprises (SMMEs), representing 98 percent of the total 
number of businesses. According to Friedrich and Visser (2005) as quoted by Nicolaides 
(2011:1044) in South Africa, the ratio of entrepreneurs to other workers is roughly 1 to 52. 
 
Table 2.4: Schedule of size standards for the definition of SME’s 
 
Firm  Employees  Turnover  Balance sheet 
Small  1-49  Maximum 13m  Maximum R5m  
32 
 
Medium 51-200 Maximum R51m Maximum R19m 
Source: Government Gazette of the Republic of South Africa (2003) 
 
Cant (2017:77) in the National Small business Act of 1996 (Act No.102 of 1996) defining the 
various categories of SMMEs, categories can be seen to use the size of the business and annual 
turnover as a measure as quoted from Marnewick in 2014. Table 2.5 below indicate various 
categories of SMMEs. There are five divided categories such as survivalist enterprise, micro 
enterprises, very small enterprises, small enterprises and medium enterprises (Cass, 2012:82). 
 
Table 2.5: South Africa categories of SMMEs 
Category 
Description 
Category Description 
Survivalist 
enterprise 
A survivalist enterprise can be seen to form part of the micro-enterprise 
sector and operates in the informal sector. Such businesses are usually 
started by unemployed individuals, the enterprise will have few capital 
assets and owners are not well trained. The opportunity for growth in these 
enterprises is small. Examples are: Vendors or hawkers. 
Micro-
enterprise 
Micro-enterprises are enterprises that do not register their business formally 
(no license) as their turnover is less than R300 000. These businesses do not 
employ more than five people, usually family members. Owners usually 
have the basic training and business skills and have the potential to 
transform their business to the formal sector. Examples of micro-enterprises 
include minibus taxis, household industries and spaza shops. 
Very small 
enterprise 
A very small enterprise can be seen to operate in the formal sector and do 
not hire more than ten employees, unless in construction, mining, electricity 
or manufacturing sector. Example: Plumbers and electricians. 
Small 
enterprise 
A small enterprise can be seen to operate in the formal sector and employ 
not more than 50 employees. Such businesses can be seen to operate with a 
more complex business structure. 
Medium 
enterprise 
A medium enterprise can be seen to include additional management 
structures within their business, they employ a maximum of 100 employees, 
33 
 
however if they fall within the construction, mining, electricity or 
manufacturing sector the enterprise could employee up to 200 employees. 
Source: Adapted from: Marnewick (2014), Entrepreneur’s toolkit (2009) and Added by Cant 
on (JBRMR), Vol. 11 Issue 4 (2017) 
 
According to Masutha and Rogerson (2014:48) the promotion and growth of SMMEs for South 
Africa is one of the cornerstones to achieve economic development in this sector. Despite the 
long-standing government commitment and increased support for the sector South African 
SMMEs have not reached their intended impact, anticipated or desired by policymakers 
(Masutha et al., 2014:48). The provincial government of Gauteng has responded with a strategy 
that promises to drive resources and create possible chances for micro-enterprises (Charman, 
2017:1). 
 
2.15 ACCESS TO CREDIT AND FINANCING 
 
According to Mahajan (2014:9) on the World Bank Study, access to finance is also problematic 
for township residents, including its entrepreneurs, which only adds to their vulnerability and 
economic exclusion.  The lack or inaccessibility of bank finances is a serious constraint during 
the formation of new ventures as well as at later stages as business requires additional inflows 
of capital to support growth (Nieuwenhuizen & Groenewald, 2009:11).  
 
The SMMEs sector forms the foundation of South Africa’s economy, not just they contribute 
to national Gross Domestic Product, but especially in terms of creation of jobs (Chimucheka 
& Rungani, 2011:1). According to Singer (2014:115) when it comes to township businesses 
whether micro, small and medium enterprises, 12 percentage points less likely to use a bank 
account than MSMEs in non-township urban areas. While credit penetration is generally very 
low (less than 5 percent of MSMEs in either townships or non-township urban areas report any 
borrowing), most credit in townships originates from family and friends, whereas in non-
township urban areas it does so from banks (Singer, 2014:115). 
 
The Figure 2.3 below from Ernst & Young report (2013:7) points to the needs that 
entrepreneurs indicated as important determinants for entrepreneurship and one of the 
determinants as government programs providing funding and profile raising took a large 
percentage. 
34 
 
 
Figure 2.3: Entrepreneurs view as to which factors will have the highest impact on 
entrepreneurship culture 
 
Source: Ernst & Young report (2013:7) 
 
2.15.1 Overview through access to finance and support from institutions 
 
Due to the challenges of easy accessing finance or credit, entrepreneurs who are starting their 
businesses found it generally discouraging to continue starting a business (Cant, 2017:79). The 
typical difficulties towards small businesses obtaining finance mentioned on the GEM report 
include: inadequate collateral on the part of the entrepreneur, a lack of credit history (Financial 
Services Regulatory Task Group, 2007), the inability to produce an acceptable business plan 
according to financial institutions, poor market research and the absence of a viable business 
idea, and lack of access to vibrant markets (GEM, 2015:32). There is a lack of knowledge from 
entrepreneurs about government initiatives that provide support of finance, growth, 
competitiveness and expansion such as the Small Enterprise Development Agency (SEDA), 
the Industrial Development Corporation (IDC) and Khula Enterprise Finance (Pretorius & Van 
Vuuren, 2003:519; Page & Söderbom, 2015:44). 
 
2.15.2 Factors considered by banks when offering credit 
35 
 
 
A study by Agyapong and Darfor (2011:132) found that when loan managers are deciding on 
whether to accept or reject a loan application from small business operators, the intended 
purpose of the loan, repayment records or previous loans, repayment schedule, type of business 
activity, size of loan relative to the size of a business and also the availability of collateral are 
ranked high on the criteria list. Chimucheka et al. (2011:8) quoting from a study of Agyapong 
et al. (2011:133) the assessment of credit worthiness of small business borrowers was based 
on the experience and skills of bankers in applying basic lending principles such as the 5Cs 
approach or the CAMPARI approach.  The 5Cs approach considers the character of the 
borrower, the capacity, capital, collateral and conditions.  On the other hand, the CAMPARI 
approach involves the assessment of the character of the borrower, ability, margin, purpose, 
amount, repayment and insurance (Agyapong et al., 2011:133). 
 
Agyapong and Darfor (2011:132) on the study, confirmed that there are different criteria from 
one bank to another used to offer credit or loan applications and there are also factors to 
consider in accepting and rejecting the application. Factors considered by banks on small 
business operators include collateral, guarantee, maturity and schedule of repayment 
(Agyapong et al., 2011:132).  
 
2.15.3 Alternative financing instruments 
 
Financing instruments alternative to straight debt alter this traditional risk-sharing mechanism 
(OECD, 2015:17).  Table 2.6 provides a list of external financing techniques alternative to 
straight debt, categorised into four groups, characterised by differing degrees of risk and return, 
whose main features (modalities/operational characteristics, enabling factors, trends and 
support policies) will be outlined in detail in this report. 
 
Table 2.6: Alternative external financing techniques for SMEs and entrepreneurs 
Low Risk/ 
Return 
 
Low Risk/ 
Return 
Medium Risk/ 
Return 
High Risk/ Return 
Asset-Based 
Finance 
Alternative 
Debt 
“Hybrid” 
Instruments 
Equity Instruments 
Asset-based 
lending. 
Corporate 
Bonds 
Subordinated 
Loans/Bonds  
Private Equity  
Venture Capital  
36 
 
Factoring 
Purchase Order 
Finance. 
Warehouse 
Receipts. 
Leasing. 
Securitised 
Debt 
Covered Bonds 
Private 
Placements 
Crowd funding 
(debt) 
Silent Participations  
Participating Loans  
Profit Participation 
Rights  
Convertible Bonds  
Bonds with 
Warrants  
Mezzanine Finance  
Business Angels  
Specialised Platforms for Public 
Listing of SMEs  
Crowd funding (equity)  
 
Source: OECD (2013b) 
 
2.16. ECONOMIC IMPACT OF SOWETO 
 
2.16.1 Soweto economics overview 
 
Gauteng contributes a share of the national GDP, and 30 percent more SMMEs are located in 
the province and the SMME failure rate has a detrimental effect to the province.  The recent 
studies done on the township economy found that most of the business enterprises found in the 
townships are at a survivalist stage and informal (Gauteng Township Baseline Study, 2017; 
and the World Bank Study, 2014). According to Strydom (2015:465) large shopping 
developments in townships such as the Jabulani, Bara and Maponya malls are dependent on a 
large customer base and on attracting sustainable anchor tenants such as national grocery retail 
chains offering a full range of perishable and non-perishable grocery items to Sowetan 
residents. Some products offered by these large retailers are similar to those offered by the 
small formal and informal small businesses in the township and create what is classified as an 
intertype competitive situation (Levy and Weitz, 2012) as quoted by Strydom (2015:465). 
 
2.16.2 SMME development in Soweto Townships under Gauteng Province 
 
Interventions in improving the operations and environment of township enterprises must be 
based on a systematic understanding approach of how and when these businesses operate that 
considers: the quality of life, social capital, knowledge inputs, financing, suppliers, markets, 
infrastructure, business management skills, availability of specialised services, industrial 
support and government policies (Karuri-Sebina et al., 2014:40). According to the Gauteng 
Economic Development Agency (GEDA Report, 2016:1), the Gauteng provincial government 
had re-engineered their economic development section.  Blue IQ Investment holdings (Pty) Ltd 
37 
 
and GEDA merge to form the Gauteng Growth Development Agency in 2012 (Matli & 
Jordaan, 2016:130).   
 
Gauteng has developed the B-BBEE strategy, (SOPA, 2009) and the Strategic Procurement 
Framework, (SOPA, 2012) to ensure that the state uses procurement as the tool to create new 
industries whose goods and services will satisfy the state demand.  The aim of these policies is 
to empower and interact with many black entrepreneurs who are already running their 
businesses but need more support from government and big business 
 
 
 2.17 SUMMARY 
 
This chapter discusses literature background that support the problem statement of two 
concepts as ‘township economy’ and “informal sector’ which are part of the microeconomics 
that seek to support inclusive economy. The literature comes from different sources of 
researched information supporting the role of interventions that would transform and yield 
results for small businesses to flourish and create employment. Unemployment remains a 
challenge in South Africa as quoted from different sources such as the Stats SA survey and 
scientific journals.  SMME‟s are the driving force of economic growth and job creation.  
 
Surveys of small business failures show that entrepreneurs often have good ideas and are to 
some extend competent but they have no underlying appreciation of business and lack business 
management skills. It is therefore clear that being a successful entrepreneur involves 
knowledge, skill and determination. For job creation entrepreneurship can be possible used as 
a tool and this come out from the literature background of this report. For the purpose of this 
study on entrepreneurial orientation and perceived business success the study questionnaire 
developed by Professor Stephen Van der Merwe will be used with a slight modification to 
make the questionnaire only relevant to township business owners. 
 
  
38 
 
CHAPTER THREE 
RESEARCH METHODOLGY 
 
3.1 INTRODUCTION 
 
The literature considered in Chapter 2 demonstrated the need to establish an opinion of 
township business owners in order to produce actual facts relating to the role of supporting and 
stimulating the township economy and informal sector under the provincial government of 
Gauteng. The study is aimed at understanding the problem statement of this research. The 
chapter provides an understanding to the practical ways and to the methods used in gathering 
the information for the empirical part of this research. 
 
Chapter 3 will outline how sampling, data was collected and data analysed processes. The 
researcher opted to make use of a survey technique to collect data from the selected 
respondents.  The chapter will end with a deliberations on the limitations for this particular 
study. The technique that was utilised by the researcher is the quantitative research method. 
Elmonds and Kennedy (2013:20) explain that the quantitative research, refers to the 
applications of systematic steps of scientific method, at the same time using quantitative 
properties to research effects of the specific variables.  
 
A sample of  questionnaires were distributed amongst entrepreneurs operating small business 
in the township, such as owners of spaza shops, supermarkets, street vendors, hawkers, car 
panel beaters business, informal general dealers and  some questionnaires were also distributed 
to other institutions that support entrepreneurship as part of gathering more information about 
the problem statement of this research. Next, the method utilised for data collection and 
questionnaire design will be described. When this chapter concludes, the data processing 
method, data interpretation and evaluation of the results obtained will be discussed. 
 
3.2 THE RESEARCH TYPE DESIGN 
 
The types of research instruments were designed for this study. Creswell (2009:3) the research 
design is a plan that stretch the decisions from wide range of assumptions to a detailed methods 
of how it will be collected and analysed. The tool was designed for the purpose of collecting 
quantitative data and this was done with the use of a structured questionnaire for the purpose 
39 
 
of gathering information. The measuring instrument or tool also served as a measure on 
whether entrepreneurship is contributing meaningfully in addressing unemployment and 
poverty. The personal information section was used to obtain information about the 
entrepreneur’s level of education and past years’ experience. In the section relating to 
entrepreneurship the respondents were asked about entrepreneurial conditions and also the type 
of assistance whether as training, finance or any kind of support that would increase their 
chances of success and determine the role of external support from institutions that support 
entrepreneurship. 
 
Elmonds and Kennedy (2013:20) state that the purpose of the research design is to present a 
plan, a structure and the strategy of investigation that will be used by the researcher in order to 
obtain answers for the research questions identified. The quantitative research method is 
referred to as a deductive process and initiative in nature (Elmonds et al., 2013:20). This is 
determined by the research findings. The research questions were chosen based on the 
relevance towards the study in order to maintain an appropriate and scientific meaning.  
 
The unit of analysis for this study is selected through one township in Gauteng, the SOWETO 
Township which comprises of several townships and is under Region D of the City of 
Johannesburg Metropolitan Municipal. The quantitative research is worried about the analysis 
and production of statistical data using empirical evidence gathered from an observed setting 
(Creswell, 2014:4). Research results emanating from a quantitative method are structured.  
Creswell (2015:155) summarise the Advantages and Disadvantages of quantitative research 
method as follows on Table 3.1 below: 
 
  
40 
 
Table 3.1: Quantitative research advantages and disadvantages method 
Advantage(s): Disadvantage(s): 
The quantitative research method 
proposes a deductive approach. 
The researcher might have the 
complexity to separate a theory from the 
components of the research process. 
The theoretical discussions are logical and 
they explain how and why variables are 
related. 
The rationale may be included and left 
out of the discussion of origin and the 
underlying principle for the use of the 
theory and 
There is a clear separation of theory from 
the components of the research process 
and the reader will have an understanding 
of the study. 
The reader might not easily connect 
with other components. 
Source: Creswell (2015:155) 
 
3.2.1. Survey 
 
The word ‘survey’ can be described or interpreted as ‘to view comprehensively 
and in detail’ (Denscombe, 2010:13). Surveys have emerged in recent times as 
one of the most popular and common place approaches to social research 
(Denscombe, 2010:18).  
 
The arguments for the use of this strategy are (Descombe, 2010:18): 
 A survey can have wide and inclusive coverage. It implies that the research could have 
a breath and ‘take it all in’ panoramic view. 
 It usually relates to the present state of affairs and it endeavours to give a snapshot of 
how issues are at the specific time at which data is collected. 
 Survey work involves the idea of empirical research where the researcher gets out of 
the metaphorical chair and purposefully seeking the required information in the context 
that is being studied. 
 In fact, survey based research can presented as an accurate and generalised 
representation of the field of study (Fisher, 2015). This strategy is underpinned by the 
adoption of a structured approach. This necessitated the use of both structured and semi-
41 
 
structured questions in the survey as described in the section on data collection 
techniques below. 
 Surveys have several additional merits that include: 
 The accessing of empirical data: surveys tend to produce data based on real-
world observations. There is the notion of an active attempt by the researcher to 
go out and get information ‘straight from the horse’s mouth’ (Denscombe, 
2010:48). 
 Wide and inclusive coverage:  
 the study benefits from a span of vision which is wide and inclusive. Its breadth 
of coverage implies that it is more likely to get data based on a representative 
sample than other approaches. As a result, findings from a good survey research 
score well in terms of generalisability (Denscombe, 2010:49). 
 That surveys lend themselves to quantitative data:  
 the survey approach can be used with particular tools such as questionnaires 
comprising both structured and semi-structured questions subjected to statistical 
data analysis. 
 
3.3 RESEARCH APPROACH 
 
There are three categories which can be either qualitative, quantitative or a mixed method 
approach categorised in a research study (Williams, 2007:65). The purpose of a quantitative 
approach is to answer questions regarding where, who and how, while a qualitative method is 
an approach directed towards why and how questions (Harrison & Reilly, 2011:7).  
 
The research approach will be quantitative research and will be based on township community 
opinions, feelings and experiences through a questionnaire and cannot introduce treatments or 
manipulation effects of support by the government and interested institutions and the 
information is through first-hand experience. For this research study the questionnaire as an 
instrument used has five sections that are relevant to the initial research problem. The analysis 
will focus on benefits that are visible in terms of impact, value, progress, skills development, 
employment creation, infrastructure development and access to funding and the main 
challenges facing the township economy including SMME’s progress within the townships.  
Another selected respondents besides township (Soweto) entrepreneurial community, business 
owners and business managers, were interested institutions who support township economy 
42 
 
either financial or non-financial just to gather information that would support the research 
question. 
 
This researcher employed the deductive research approach. The emphasis was on scientific 
principles where theories were applied to the development and assessment of questionnaires.  
This leads to an attempt at explanation of casual relationships between variables. There was 
then a collection of quantitative data within the selected sample. 
 
3.3.1. The Quantitative Research work 
 
A focus group is a form of quantitative research in which a group of people are asked questions 
about their opinions, perceptions, beliefs and attitudes towards a product, service, concept or 
idea (Chinomona & Maziriri, 2015:843). The quantitative research method was used in order 
to obtain insights into how the participants perceived the programme to assist them with 
adequate knowledge to initiate and manage their businesses located in the township area. 
Welman, Kruger and Mitchell (2005:8), described quantitative research as research that 
evaluates objective data consisting of numbers, where flexibility is limited to prevent any form 
of bias in presenting the results and where the purpose is the abstraction of reality.  
 
Chapter 4, will contain the findings for the empirical research were based on the responses 
obtained from the questionnaire that were distributed to the entrepreneurs. The quantitative 
research results were categorised, displayed and grouped on that chapter. The researcher 
collected the data by moving from one business enterprise to another one. Quantitative data is 
subjected to analyses using descriptive statistics analysis.  
 
3.3.2. Contents of the quantitative research questionnaire 
 
The quantitative research questionnaire content were chosen to highlight the differences in; 
personal information, sources of  business information that include; business ideas, levels of 
creativity, skills and knowledge, educational qualification levels, access to resources, 
motivational factors, obstacles faced by entrepreneurs and financing needs of entrepreneurs.  A 
detailed quantitative research questionnaire sample layout is attached to this study as Annexure 
A. 
 
 
43 
 
3.4 TIME FRAME HORIZON 
 
The collection of data for this research will be done over a period of that gives respondent time 
to complete the questionnaire.  The questionnaires were hand delivered, sent via email and 
collected, rather than posted.  Data analyses done and will be reported in Chapter 4.  It is the 
limited timeframe that inherently made it impractical to conduct an exhaustive study.  
However, the methods used to collect data ensured validity and reliability which strengthened 
the study’s attempt to produce a reasonably comprehensive study. 
 
3.5 UNIT OF ANALYSIS 
 
This study focused on entrepreneurial community, business owners and business managers in 
general but with a particular reference to the township economy in Soweto as a survey strategy 
for this research as mentioned on Chapter One in a problem statement.  
 
3.6 RESPONDENTS TO THE SURVEY 
 
The population target for sampling were the entrepreneurial community, business enterprise 
owners and business managers as participants for this research. Walliman (2011:94) explains 
that the population does not signify a number of people however it is a collective term that is 
used to articulate the total quantity of things, types of objects, people and or even events. In 
pursuit of this study research, the researcher selected population of entrepreneurial community, 
business owners and business managers within Soweto as a township.  
 
3.6.1 Sampling Strategies 
 
The target population and subsequent sampling units were based on small businesses in various 
townships of Soweto. The sample size was limited to one township of Gauteng province for 
due to limited resources. The case study research question is based on outcomes role of 
supporting and stimulation of the township economy and informal sector as a problem 
statement.  Sample information are a combination inputs from the interested institutions that 
support township economics financial or non-financial, entrepreneurial community, business 
owners and business managers. A random selection was done from the strata for questionnaire 
distribution.  
 
44 
 
The sample was randomly selected from the population various sub-groups and was divided 
into smaller groups and a stratified Random Sample technique refers to a population sample 
that requires the population to be divided into smaller groups called stratal (Scheaffer,  
2006:15). Participants were chosen as a sample from various strata for this research and they 
consisted of owners of retail spaza shops and informal general dealers, building and 
construction, informal car mechanics and panel beaters, transportation, informal general 
dealers and catering small business as meat place (shisanyama) and township pubs, informal 
supply and chain businesses, hair salons and other small scale businesses as informal traders 
as street vendors and hawkers. 
 
3.6.2 Sample Size Collected and Framework 
 
A sample could be deducted from that of a population and it is a representative element chosen 
from the population to study the characteristics of the whole population. Malhotra (2010:375) 
further states that an effective sampling strategy has five stages, which include defining the 
target population, identifying a sampling frame, selecting an appropriate sampling technique, 
determining an appropriate sampling size and lastly implementing an effective sampling 
process.  
 
The sample size can be calculated using a Raosoft sample size calculator (Chimucheka & 
Rungani, 2010:9. Sampling theory guarantees goal results, regardless of the population size 
provided that the sample size is bigger than 30 (n>30). It is for this reason that the researcher 
sampled 100 to represent a very large population. According to Walliman (2011:96) the 
probability sampling is a procedure in which the samples are collected in a process, with the 
purpose that gives all the individuals in the population an equal opportunity of being selected. 
 
3.7 METHODS UTILISED TO OBTAIN DATA 
 
A questionnaire was designed to endorse and reflect on the main objectives of this study. The 
study research questions allowed for descriptive data to be collected.  For data gathering tool, 
the study used structured questionnaire survey for the information collected to all the 
participants that participated in the study. Information obtained from the literature survey was 
used to construct the research questionnaires. Questionnaires were delivered personally, others 
were sent by means of email to the respondents and the completed surveys were collected from 
the respondents (Ferell et al., 2015:91).  In order to assess an awareness of respondents, the 
45 
 
primary data information is directly collected by the researcher from the participants. 
Demographic area included selected areas in Region D of the City of Johannesburg 
Metropolitan Municipal as the Soweto Township. 
3.7.1. Primary Data and the Collection Tool Instruments 
 
Primary data is the information collected to solve the design research problem under 
investigation. According to Denscombe (2010:18, 172 & 197) the common techniques used as 
collection instrument tools are; interviews, questionnaires and observations. The researcher 
limited the data collection techniques to questionnaires as a primary instrument of collection 
of data.  
 
3.7.2 Questionnaire Technique 
 
The most popular method of data collection in a survey research is through the use of a 
questionnaire. It was the main tool utilised for the merits to be expanded upon. It is celebrated 
for its characteristic wide coverage. Questions, mainly the structured ones, align the responses 
of the sample to the expectations of the researcher through the provision of options.  In other 
words, the research questions are translated into the language of the respondents. In this study, 
the researcher used the questionnaires to solicit data that would answer the research questions.  
The questionnaires were deliberately designed to target the entrepreneurial community, 
business owners and business managers. Appendix A is the structure of the questionnaire that 
was administered to the respondents. 
 
As discussed in the section of survey, the use of questionnaires are highly ranked for their 
objectivity as compared to other techniques. There are less chances of interviewer bias and they 
collect data quicker than interviews.  This advantage is caused by anonymity and privacy which 
eliminates pressure on the respondents. 
 
These questionnaires were directly given to the entrepreneurial community, business owners 
and business managers to enhance immediate responses exactly in a manner explained by 
Denscombe (2010:157).  The questionnaire was structured in a manner to maintain uniformity 
and hence enhancing comparability of answers when presenting and analysing the collected 
data. 
 
46 
 
The following advantages arised to the researcher for utising the questionnaire medium as 
proposed by Denscombe (2010:169): 
 The questionnaires were very economical in the sense that they supplied a considerable 
amount of research data for a relatively low cost in terms of materials, money and time. 
 Questionnaires collected data that was not contaminated through variations since they 
supplied standardised answers to the respondents and data could not be affected by 
‘interpersonal factors’. 
 
In some of the questionnaires ticks (X) or (√) was used and other as to specify the respondent 
views was included with exception not to cause confusion.  Structured answer questionnaires 
exposed the biases of responses since the researcher had predetermined options.  
 
3.7.3 The Pilot Study 
 
The researcher conducted a pilot study in order to test if and if need be, to modify the 
questionnaire.  It is the pilot study that made the researcher to realise the duration it takes to 
respond to a questionnaire and making questions straight forward and speedy as possible by 
including the ticks (X) or (√) as to speed up the process as an option to simplify the respondent 
responses (Denscombe, 2010:162).  It is the pilot study that made the researcher to reduce 
open-ended questions.  The researcher should prepare questions that are clear and easy to 
answer, which is usually referred to as a close ended questions (Lategan et al., 2011:42).  The 
simplicity of the questionnaire was modified after consultation with the research supervisor 
and also after checking the quality of the first batch of responded challenges categorised as 
interested institutions.   
 
3.8 VALIDATION AND RELIABILITY  
 
It was very necessary that the researcher obtained all truthful answers and prudent approaches 
were necessary to avoid being a gullible dupe who accepted all that was said at face value 
Denscombe (2010:188). 
 
3.8.1 Validility and Reliability of this case study 
 
The study will be based on empirical investigation and is based on real-life situation and is also 
based on perception, opinions and experience of individual participants.  The research approach 
47 
 
and data collection is based on the township business community’s opinions, feelings and 
experiences as reported in the questionnaire as means of data collection and cannot introduce 
treatments or manipulate by any external institutions.  The information was through first-hand 
experience as it was collected.   
 
The researcher read the questionnaire to the respondent and transcribes the data collected from 
the survey to capture a general sense of the whole ideas presented. Analysis and findings are 
supported by including the direct quotes from the respondent. Organised data are with the aim 
of formulating general themes and link them together to create a good understanding of the 
main theme that is researched for that particular study. Cronbach's alpha coefficient has been 
used, which recommends a value between 0.7 and 0.8 for the reliability and consistency of any 
items. A value of 0.7 is the internationally acceptable standard.  A low coefficient can mean 
that the question asked is not properly formulated and does not correlate strongly 
 
The researcher enhanced reliability by diligently recording the data from the questionnaires. 
Furthermore, the researcher was deliberately conscious of the theories obtained in Chapter 2 
and the questions were aligned to answer the research questions and achieve the study 
objectives in a way that would yield the same conclusions should another examination be 
pursued by contemporary researchers The questionnaire was constructed and the following 
methods were used to analyse the information that was collected:  
 Reliability and validity analysis.  
 Descriptive analysis.  
 Significance tests.  
 
3.9 DATA ANALYSIS INTERPRETATION 
 
Data collected were quantitative and were subjected to analysis.  All information and notes 
taken from the process of gathering information either from the township entrepreneurial 
community, business owners including business managers and interested institutions 
(stakeholders) were subjected to this process of analysing and interpretation of information 
obtained.  The meaning of displayed results would be established by interpreting patterns, 
explanations, information flows, propositions, configurations and regularities.  According to 
Walliman (2011:97) the collected data can be analysed by using a Statistical Package for the 
Social Science (SPSS) version 25.  
 
48 
 
This software will assist the researcher with the calculations and the presentation of the data. 
The data is illustrated in a percentage form.  Pallant (2007:52) gives explanation that a 
descriptive statistic is essential in decision making. This statistical technique is suitable to 
address specific research questions.  Descriptive statistics and the appropriate inferential 
statistics was used to derive meaning from the data.  Data collected were analysed in terms of 
frequencies and percentages. The Special Package of Social Science technology will be used 
in this process together with Microsoft Excel. In the next Chapter 4, the meaning of data 
collected would be following interpreted and presented as results using tables, charts and 
graphs. 
 
3.10 LIMITATIONS 
 
The most inherent limitation was the non-inclusion of all township businesses in data collection 
as per full circumference area of SOWETO. The contributions of this research has its 
limitations as were spelt out in the demerits of a survey strategy and questionnaire technique, 
which provide avenues for future researches. 
 
The following limitations were recognized: 
 The study only focused on a specific township in Gauteng as it cannot deal with every 
township within the province. 
 The area coverage of the Soweto as a township cannot be covered as the researcher has 
limited resources to cover the whole township. 
 The lack of time and financial resources to conduct a more detailed and thorough 
quantitative empirical study. 
 The study focused mainly on the township business owners, township entrepreneurship, 
township entrepreneurial community and the informal economics as consideration for 
the research and within the legal framework of both the province and the country.  
 The study was conducted amongst South African SMME's operating under South 
African local authorities' rules and regulations, the results related primarily to the South 
African situation and should be interpreted as such. 
 
3.11 STUDY CHAPTER SUMMARY 
 
49 
 
A survey strategy as data collection method was used because of the nature of the study and its 
advantages improved validity and reliability of data.  Samples were collected from the Soweto 
entrepreneurial community, business owners and business managers were selected using 
probability and non-probability methods. The following section as Chapter 4 consists of 
interpretations, analysis and presentation of findings obtained from the data analysis.  The 
questionnaires were analysed by means of the Statistical Package of Social Science (SPSS) and 
the data will be analysed as a results to establish the conclusions of this particular study. The 
results therefore will be presented in response to the research questions and objectives in 
chapter one. 
  
50 
 
CHAPTER FOUR 
RESULTS AND DISCUSSION OF EMPIRICAL 
STUDY 
 
4.1 INTRODUCTION 
 
The aim of this study was intended to understand economical entrepreneurial activities in the 
township, regarding the assessment role of support of these activities and it be verified in terms 
stimulating the township economy. The key to determine the outcomes or verify problem 
results will be to look at the business establishments, contribution to tax as in a form of a 
registered business, creation of employment, source of funding, training and financial needs, 
motivational factors to start a business and hardships faced by entrepreneurs.  
 
4.2 MEASURING INSTRUMENT 
 
In an attempting to present answers to the concepts highlighted for this particular research, this 
chapter delivers the primary data received with the assistance of an instrument tool as a 
questionnaire for this study. Quantitative research approach has been followed in this study 
and the key findings of the study provides the information from Sixty eight (68) respondents 
sampled from the township of Soweto. Other supplementary information was researched from 
journals, observation and interviews with interested stakeholders on this particular research 
problem. The study was aimed at collecting sufficient information that would assist to explain 
the challenges of township entrepreneurs’ development and also the type of assistance that 
would increase their chances of success. 
 
4.3 STUDY RESULTS 
 
This chapter will further encompass comprehensive data collected in the form of closed-ended 
questions (quantitative: frequencies). Eighty questionnaires were given to the entrepreneurs in 
Soweto and 71 were collected and 68 were used for this studies. The quality of 68 
questionnaires collected had some errors but were usable for the study. 
 
4.4 STATISTICAL DATA ANALYSIS 
 
51 
 
The analysis of the data collected, the Statistical Consultancy Services of the North-West 
University, was approached and it was analysed using Statistica and SPSS Inc. 2015.IBM 
SPSS® Statistics Version 25. The validity of the questionnaire was assessed by calculating 
Cronbach Alpha coefficients. The results are discussed on this chapter four. 
 
4.5 DESCRIPTIVE STATISTICS AND FREQUENCIES 
 
The questionnaire was structured in FIVE SECTIONS A - E and the feedback from 
participants answers are detailed as indicated below: 
 
SECTION A: PERSONAL INFORMATION (BUSINESS OWNER). 
 
This section sought to gain an understanding of the respondents and close ended used questions 
to collect information such as highest academic qualification, occupational background and 
years of self-employment with the aim of understanding the character of the business owner 
relationship with the aim of external role support and stimulation of the township business 
economy. Questions were prepared in a form of a multiple-choice for the respondent to have 
choices of more than one. This information gathered on this section allowed the researcher to 
get a better understanding of the entrepreneur’s background.  A total of 68 business owners 
were interviewed.  The sections below discuss the findings. 
  
52 
 
4.5.1 Distribution of the highest academic qualifications of the entrepreneurs 
 
 Results obtained. 
 
Figure 4.1: Distribution of academic qualifications of entrepreneurs 
 
Source: Question A1 of Questionnaire Findings 
 
 Analysis of the results 
 
The above results indicate that 24 (35%) of entrepreneurs interviewed have diplomas, 17 (25%) 
have matric, 10 (14.7%) have certificates, 8 (11.8%) have postgraduate degrees, 7 (10%) have 
university degrees and 2 (2.9%) have qualification lower than matric. The participants’ level 
of education was observed as having a relationship with a type of the business an entrepreneur 
have but the level of education does not guarantees or qualifies the business success.  There 
are some other factors that qualifies the business success. Participants selected more than one 
choices of which the survey ended up with 87 frequences. 
 
 
  
2
17
10
24
7
8
0
5
10
15
20
25
30
Lower than
matric
Matric Certificate Diploma University degree Postgraduate
degree
FR
EQ
U
EN
C
Y
ACADEMIC QUALIFICATIONS 
53 
 
4.5.2 Distribution of occupational background (previous occupational background) 
 
 Results obtained. 
 
Figure 4.2: Distribution of occupational background (previous occupational background) 
 
Source: Question A2 of Questionnaire Findings 
 
 Analysis of the results 
 
There were no entrepreneurs with top or senior management background, 25% have been self-
employed, 21% have never been employed, 31% have a previous work experience, 10% have 
been in a first line management and 13% have a middle management background. Participants 
selected more than one choices of which the survey ended up with 87 frequences. 
 
  
Unemployed, 14, 
21%
Self-employed, 17, 
25%
Worker, 21, 31%
First line 
Mangement, 7, 10%
Middle 
Management, 9, 
13%
Top/ Senior 
Management, 0, 0%
OCCUPATIONAL BACKGROUND
54 
 
4.5.3 Number of years self-employed 
 
Figure 4.3: Years self-employed 
 
Source: Question A3 of Questionnaire Findings 
 
There were (Six) 6 entrepreneurs with less than a year self-employed, 16 (sixteen) with 1 – 3 
years, 17 (seventeen) with 4 – 5 years, 16 (sixteen) with 6 – 10 years and other entrepreneurs 
who are 13 (thirteen) had different years ranging from 12 - 22 years (twelve to twenty two) 
self-employed.  Self-employed on this research means having the responsibility of running your 
own business. 
 
SECTION B: BUSINESS INFORMATION. 
 
This section represents results by participants on their business information, profile and its 
activities. The results included the sector at which the business belong, legal status, business 
operational period, path to business ownership, source of start-up funding, business operational 
premises, number of employees if any, training received source and present business 
ownership. 
 
 
 
 
 
Less than a year, 6
1 - 3 years, 16
4 - 5 years, 17
6 - 10 years, 16
Other, 13
Years Self-employed
Less than a year 1 - 3 years 4 - 5 years 6 - 10 years Other
55 
 
4.5.4 Economic sector where your business operate 
 Results obtained. 
Table 4.1: Economic sector of your business  
Economic Sector Frequency Percentage 
Retail Industry (01) 8 9.2 
Wholesale trade (02) 2 2.3 
Manufacturing (03) 6 6.9 
Construction (04) 8 9.2 
Transportation/ distribution 
(05) 
6 6.9 
Accomodation and 
restaurant (06) 
3 3.4 
Food Industry (07) 10 11.5 
Agriculture/ Forestry/ 
Fishing (08) 
0 0 
Type of service (09) 14 16.1 
Other (10) 9 10.3 
TOTAL 68 100 
Source: Question B1 of Questionnaire Findings 
 
 Analysis of the results 
 
The majority of participants’ economic sector were operating on the service sector with 14 
(16.1%), followed by Food industry with 10 (11.5%), other business type with 9 (10.3%), 
Retail Industry and Construction with 8 (9.2%) respectively, Manufacturing and 
Transportation/ distribution with 6 (6.9%) respectively, Accommodation and restaurant with 3 
(3.4%) and Wholesale trade with 2 (2.3%). The service sector with 14 (16.1%) include, 
Funeral, Laundry, Car wash, Cleaning, Tourism, IT, Retail and Finance, Event Management 
(Planner), Early Child Care, Training Provider, Automotive Repair, Security services and other 
sectors with 10 (10.3%) include, Water proofing, Furniture design, House Shades, Welding, 
Music, Fashion Design, Hospital, Bakery, restaurant, art and entertainment and Guest house 
and Spa. 
 
 
  
56 
 
4.5.5 Formal resgistration status of your business 
 
 Results obtained. 
 
Figure 4.4: Legal status of your business 
 
Source: Question B2 of Questionnaire Findings 
 
 Analysis of the results 
 
The above graph shows legal status of businesses, with 56 (56.82%) as registered and 12 
(12.18%) as unregistered. The Companies and Intellectual Property Registration Office 
(CIPRO) is responsible for the formal registering of businesses. 
 
 
 
 
 
 
 
Registered, 56, 
82%
Not registered, 12, 
18%
Legal status of your business
Registered Not registered
57 
 
 
4.5.6 Duration of your business in operation 
 
 Results obtained 
 
Figure 4.5: Duration of business in operation 
 
Source: Question B3 of Questionnaire Findings 
 
 Analysis of the results 
 
The results indicate the duration of business in operation, ranging from 6 months to 22 years 
on average from sixty eight (68) participated township entrepreneurs for this research. 
 
 
 
 
 
 
0
5
10
15
20
25
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67
N
u
m
b
e
r 
o
f 
Y
e
ar
s
Number of Business
DURATION OFYOUR BUSINESS OPERATING
58 
 
4.5.7 Path of business ownwership 
 
 Results obtained. 
 
Figure 4.6: Path of business ownership 
 
Source: Question B4 of Questionnaire Findings 
 
 Analysis of the results 
 
Figure 4.6 indicates that most entrepreneurs started their businesses with fifty nine (59), four 
(4) joined their family businesses, three (3) started with business partners, one (1) purchased 
the business shows and another one (1) inherited the business. 
 
 
 
 
 
  
59
1
4
1
3
0
10
20
30
40
50
60
70
Founded the business Purchased the
Business
Joined the family
Business
Inherited the
Business
Business Partnership
B
U
SI
N
ES
S
PATH TO BUSINESS OWNERSHIP
PATH TO BUSINESS OWNERSHIP
59 
 
4.5.8 Source of start-up funding 
 
 Results obtained. 
 
Figure 4.7: Source of start-up funding 
 
Source: Question B5 of Questionnaire Findings 
 
 Analysis of the results 
 
Participated entrepreneurs of about 56%, started their business out of their personal savings; 
29% obtained their start-up capital from borrowings or as gifts; 6% from the bank; 6% were 
funded by government; 2% were also funded by IDC and 1% were from private funding. 
 
 
 
 
 
 
Personal savings
56%
Borrowed or as  gift
29%
Government funding
6%
Sold previous business
0%
Commercial bank
6%
IDC
2%
Private funding
1%
Source of start-up funding
Personal savings Borrowed or as  gift Government funding Sold previous business
Commercial bank IDC Private funding
60 
 
4.5.9 Business premises where the business operates 
 
 Results obtained. 
 
Figure 4.8: Indicate your business premises 
 
Source: Question B6 of Questionnaire Findings 
 
 Analysis of the results 
 
Out of 68 participants for this research approached, 48% operated  their businesses at home, 
18% at outlying business area, 13% at industrial area and other 21% operated their businesses 
at other places where they rent the premises, a door to door type of a business and the 
government allocated space or yard.  Location of the business is important towards determining 
the failure and its success.  Township location have challenges of aging infrastructure, lack of 
investing to townships, overpopulation, lack of resources, non-compliance to payment of rate 
and taxes and low employment levels.  The location is one of the external socio-economic 
challenges that small business encounter.  These are factors that need to be considered when 
choosing a location: proximity of raw materials, proximity of costumers and adequate 
Home, 33, 48%
Outlying business 
area, 12, 18%
Industrial area, 9, 
13%
Agriculture land, 0, 
0%
Other, 14, 21%
Where does Business operates
Home Outlying business area Industrial area Agriculture land Other
61 
 
infrastructure.  This is what the research seems to understand as what sort of barriers stood in 
their businesses activities. 
 
4.6.1 Number of Employees employed by your business 
 
 Results obtained 
 
Figure 4.9: Permanent employees employed by your business 
 
Source: Question B7 of Questionnaire Findings 
 
 Analysis of the results 
 
Figure 4.9 indicates that 44% of the respondents have 3 to 5 employees; 19% have 0 to 2 
employees; 13% have 10 to 20 employees; 12% have employed 6 to 10 employees; 7% have 
employees greater than 20 and 4% have the owner as an employee. This proves that small 
businesses in the township does create employment as part of township economy activities. 
 
 
 
 
 
 
 
 
3
13
30
8 9
5
0
5
10
15
20
25
30
35
Myself 0 - 2 3 to 5 6 to 10 10 to 20 > 20
Number of employees working for the business
62 
 
4.6.2 Any form of training received from the government? 
 
 Results obtained. 
 
Figure 4.10: Have you ever received any training from the government? 
 
Source: Question B9 of Questionnaire Findings 
 
 Analysis of the results 
 
Figure 4.10 results, indicates about receiving training from the government that the majority of 
entrepreneurs interviewed (69%) have never received any form of training but 31% did 
received some form of training. The training from government vary from type of SETA’s, 
government agency and Business Skills Hubs, Labour Department, educational training 
institutions and GEP (Gauteng Enterprise Propeller). The private training vary from attaining 
training from previous work experience, tertiary institution, self-taught and other stakeholders. 
The survey proves the kind of support received by entrepreneurs as in a form of training by 
either government or other organisations but the majority from this survey has never received 
any support as in a form of training. From Chapter 3, as was mentioned, the reason why 
businesses tend to fail is because of the lack of training as also part of business skills. 
 
 
 
 
 
 
21, 31%
47, 69%
Any training from government received?
Yes No
63 
 
4.6.3 Business ownership status 
 
 Results obtained 
 
Figure 4.11: Status of business ownership 
 
Source: Question B10 of Questionnaire Findings 
 
 Analysis of the results 
 
Out of the total sample of 68 approached, 87% entrepreneurs currently business is their first 
that they own, 4%  has another business they own, 3% went out of business, 2% were still 
successful; and other 4% own another business but were interviewed on a particular business 
where the reseacher was seeking information about it.  
 
SECTION C: MOTIVATIONAL FACTORS. 
 
The purpose of this section is to determine main motivational factors that drove entrepreneurs 
to enter into their own business venture. In this exercise entrepreneurs had to mark X to indicate 
that they agree or disagree with the statements: 1= strongly disagree, 2 = disagree, 3 = neutral 
view, 4 = agree, and 5 = strongly agree. Refer to Appendix A at the back. 
 
4.6.4 Variables measuring entrepreneurial motivational factors 
 
Yes
87%
No
4%
Went out of business
3%
still successful
2%
Sold off
0%
Other
4%
Status of business ownership
Yes No Went out of business still successful Sold off Other
64 
 
Section C of question C1 – C15, consisted of 68 statements with the intention of determining 
the entrepreneurship motivational factors from the respondents. Fiveteen constructs were used 
namely as indicated on the table below that shows the dimensions of entrepreneurial 
motivational factors with the mean (x) measured levels of application and recognition. The 
standard deviation (s) indicates how the recorded data is distributed. It provides the number to 
add to, or subtract from the mean value (x) to obtain the highest or lowest accurate perspective 
without being concerned about the effect of outliers. 
 
 Results obtained 
 
Table 4.2: The dimensions of entrepreneurial motivational factors 
 Constructs Mean Std. Deviation N 
C1 Need for Independence 3.94 0.844 68 
C2 flexible work schedule 3.16 1.002 68 
C3 Need a challenge 3.71 0.793 68 
C4 Self-fulfilment 3.91 0.805 68 
C5 Develop hobby 3.46 0.871 68 
C6 Role models 3.21 1.140 68 
C7 Redundancy (retrenchment) 2.69 1.162 68 
C8 Dificulty to find a job 3.35 1.255 68 
C9 Dissatisfaction with salary job 3.25 1.028 68 
C10 Compatibility with family duties 2.81 1.011 68 
C11 Insufficient family income 3.71 1.023 68 
C12 Desire for wealth 3.94 0.751 68 
C13 Ensure high job security 3.32 0.953 68 
C14 Entered the family business 2.15 1.136 68 
C15 Confidence in the product/ service you offer 4.32 0.679 68 
 TOTAL 3.93 0.964 68 
Source: Question C1 to C15 of Questionnaire Findings for Motivational Factors 
 
 Analysis of the results 
 
Table 4.2 results indicate an average mean of 3.93 that was recorded when dealing with all 15 
constructs in measuring an entrepreneurial motivational factors with an average standard 
65 
 
deviation of 0.964. The constructs which scored the highest above the average mean value (as 
a motivational factor) are confidence in product/ service offered (C15), need for 
independence (C1) and Desire for wealth with an average of 4.32, 3.94 and 3.94 respectively 
scored mean values. The insufficient family income (C11), need for challenge (C3) and 
difficult to find a job (C8).  The constructs that scored far lower than the avregae value 
demonstrated a motovational factors that mark least than others were compatibility with 
family duties (C10) with a recorded mean value 2.81, redundancy (retrenchment) (C7) with 
2.69 and entered the family business (C14) with a lowest mean value of 2.15. 
 
SECTION D: OBSTACLES FACED BY ENTREPRENEURS. 
 
The aim of this section is to accumulate a body of knowledge of barriers as well as challenges 
that inhibit township entrepreneurs to start their own business ventures.  Section D of question 
D1 – D13, consisted of 68 statements with the intention of determining the factors or obstacles 
that inhibit township entrepreneurs to start their own business. In this exercise entrepreneurs 
had to mark X to indicate that they agree or disagree with the statements: 1= strongly disagree, 
2 = disagree, 3 = neutral view, 4 = agree and 5 = strongly agree.  Refer to Appendix A at the 
back. 
 
4.6.5 Variables measuring obstacles faced by entrepreneurs 
 
 Results obtained 
 
Table 4.3: The dimensions factors that hinders township entrepreneurs to start their  
business 
 Constructs Mean Std. Deviation N 
D1 Lack of start-up capital 4.15 0.821 68 
D2 Lack of business plan 3.12 1.135 68 
D3 Awareness/access to business information 3.70 0.835 68 
D4 Lack of timely business information 3.45 0.875 68 
D5 Lack of role models 2.55 1.034 68 
D6 Isolation from business network 3.13 0.886 68 
D7 Lack of collateral 4.13 0.869 68 
D8 Lack of business management skills 3.58 1.047 68 
66 
 
 
Source: Question D1 to D13 of Questionnaire Findings for Obstacles faced by Entrepreneurs 
 
 Analysis of the results 
 
Table 4.3 results indicate an average mean of 3.46 that was recorded when dealing with all 13 
constructs in measuring that hinders township entrepreneurs to start their own business with an 
average standard deviation of 0.942. The constructs which scored the highest (as an obstacle) 
above the average mean value were a lack to obtain credit (D10), lack of start-up capital 
(D1) and lack of collateral (D7) at 4.28, 4.15 and 4.13 mean values respectively, 
awareness/access to business information (D3) at 3.70, lack of business management skills 
(D8) and lack of education and training (in general) (D9) at 3.58 and 3.52 mean values 
respectively.  Others were below the average mean value of  3.46 and are lack of timely 
business information (D4) at 3.45 and the rest of constructs are between 3.25 to 3.12.  The 
constructs that scored below  the average value of 3.46 were lack of self-confidence (D11) 
with a recorded mean value 2.88 and the lack of role models (D 5) with a mean value of 2.55. 
 
SECTION D: OBSTACLES FACED BY ENTREPRENEURS CURRENTLY IN THEIR 
RUNNING BUSINESSES 
 
The aim of this section is to gather knowledge of barriers as well as challenges that inhibit 
township entrepreneurs to start their own business ventures. Section D of question D15 – D25, 
consisted of 68 statements with the intention of determining the factors or obstacles that inhibit 
township entrepreneurs to start their own business.  In this exercise entrepreneurs had to mark 
X to indicate that they agree or disagree with the statements: 1= strongly disagree, 2 = disagree, 
3 = neutral view, 4 = agree, and 5 = strongly agree.  Refer to Appendix A at the back. 
 
4.6.6 Variables measuring factors currently facing entrepreneurs in running their 
businesses 
D9 Lack of education and training (in general) 3.52 1.146 68 
D10 Lack of access to or to obtain credit 4.28 0.831 68 
D11 Lack of self-confidence 2.88 1.023 68 
D12 Risk averse (fear of failure) 3.18 0.886 68 
D13 Legislative focusing on entrepreneurship 3.25 0.859 68 
 TOTAL 3.46 0.942 68 
67 
 
 
 Results obtained 
 
Table 4.4: The dimensions factors (obstacles) that township entrepreneurs are facing  
currently in their running business 
 Constructs Mean Std. Deviation N 
D15 Inability to secure Credit facility 3.84 0.994 68 
D16 Family pressure (gender role 
excpectations) 
2.46 0.943 68 
D17 Awareness/Acess to business support 3.25 0.910 68 
D18 Lack of timely business information 2.99 0.788 68 
D19 Lack of Role models and support 2.27 0.898 68 
D20 Isolation from business network 2.84 0.828 68 
D21 Socio-cultural environment 2.85 0.875 68 
D22 Lack of business management skills 2.75 0.975 68 
D23 Liquidity problems and other financial 
problems 
3.81 0.892 68 
D24 Gaining acceptance/respect of people 
(internally and external) 
2.33 1.006 68 
D25 No time for trainig/upgrading of skills 2.64 0.900 68 
 TOTAL 2.91 0.909 68 
Source: Question D15 to D25 of Questionnaire Findings for factors (obstacles) faced by 
Entrepreneurs currently in their businesses. 
 
 Analysis of the results 
 
Table 4.4 results indicate an average mean of 2.91 that was recorded when dealing with all 11 
constructs in measuring factors (obstacles) that township entrepreneurs are facing currently in 
their running business, with an average standard deviation of 0.909. The constructs which 
scored the highest mean values above the average mean value were inability to secure Credit 
facility (D15) , liquidity problems (D23) and awareness/access to business support (D17) 
at 3.84, 3.81 and 3.25 respectively. The highest value of 3.84 is high and it’s because 
entrepreneurs are unable to obtain funding from credit providers that could be from the lack of 
collateral and other factors which came from this survey.  The lack of funding is one of the key 
internal socio-economic challenges that entrepreneurs encounter. Others were below the 
average mean value of  2.91 and the constructs scored lower than the avarage mean value were 
68 
 
gaining acceptance/respect of people (internally and external) (D24) with a recorded mean 
mean value of 2.33 and the lack of role models and support (D19) with a mean value of 2.27. 
 
SECTION E: TRAINING AND FINANCING NEEDS OF BUSINESS OWNERS. 
 
This section is about accumulate information and about the training and financial needs of the 
township entrepreneurs who participated on this research study. Section E of question E1 – E7, 
consisted of 68 statements with the main purpose to establish the developmental needs of the 
township entrepreneurs in their roles. 
 
4.6.7 Any development, training and support gained from any public and private sector? 
 
 Results obtained. 
 
Figure 4.12: Any development, training and support gained from any public and private 
sector? 
 
Source: Question E1 of Questionnaire Findings 
 
 Analysis of the results 
 
Yes
55%
No
45%
Any development, training and support gained from any 
public and private sector?
Yes No
69 
 
The above graph reveals that 37 (55%) of entrepreneurs did receive support, training or were 
developed by either government agency or the private sector (non-governmental group) and 30 
(45%) there was a lack of training and support developments. One (1) respondent did not 
answer the question to make a total of 68 participant. In order for a business to grow, an enabling 
environment has to be created and the local government together with interested parties can 
assist township entrepreneurs in creating an enabling environment by creating adequate 
training facilities, workshops and business incubators whereby they can be trained and guided 
to establish and sustain their aspired business ventures. 
 
4.6.8 Type of training received by entrepreneurs 
 
 Results obtained on Part two of Question E1 
 
Figure 4.13: Type of training received by entrepreneurs 
 
Source: Question E1 of Questionnaire Findings (Part two) 
 
 Analysis of the results 
Participants selected more than one options for this question. Participants who opted for (other) 
as their option, indicated the type of training that they have received as from Varsity and 
Technical Colleges (vocational training), Appedt (Umalusi and DHET), Boston College 
(Musical arrangement, recording and producing), CETA & Eskom Contract Training 
10 10
13
17
6
24
0
5
10
15
20
25
30
Technical skills Communication
skills
Accounting skills Management
skills
Technological
skills
Other
TYPE OF TRAINING RECEIVED
70 
 
Academy, ETDP SETA, Tourism Department, Fashion Design School, Gauteng Township 
Retail Enterprise Development Programme, Government Nursing College & Imperial Group, 
Medical School & Private Practice, Sas-SETA, WHS Business School, MerSETA, NHBRC, 
NYDA & Paradise Boutique Cuisine, Nhlamulo Host Investments and Macro-GEP Pilot 
Project. 
 
4.6.9 Type of obstacles experienced during the financial application process 
 
 Results obtained. 
 
Figure 4.14: Obstacles experienced in application process for financial assistance 
 
Source: Question E2 of Questionnaire Findings 
 
 Analysis of the results 
 
The above graph (figure 4.14) reveals that participants opted for more than one choice. The 
majority of participants (who are 38) find the lack of collateral as obstacles that they have 
experienced in their application process for finance assistance. Ten (10) find complexity in 
application forms. Eight (8) complained about too many forms to complete and also another 
10
8 8
7
38
7
0
5
10
15
20
25
30
35
40
Complexity of
application forms
Too many forms to
fill in
Time frame of
feedback was long
Ability of banker
to inform and
assist in the
processs
Lack of
colateral/security
Other (please
specify)
N
U
M
B
ER
 O
F 
FR
EQ
U
EN
C
Y
OBSTACLES EXPERIENCED IN FINANCE 
APPLICATION PROCESS
71 
 
eight (8) about time frame of feedback was long. Seven (7) was about the ability of the 
participants to be given information and be assisted by the banker in the entire application 
process. Other seven (7) participants specified different options as; they have never tried to 
apply, borrowed from family members, credit score low, never tried and none as their response. 
These are barriers that stood in their businesses activities as part of the research problem 
statement that the survey wanted to understood. 
 
4.7.1 Reason (s) for financial application rejection 
 
 Results obtained. 
 
Figure 4.15: Reason for financial application rejection 
 
Source: Question E3 of Questionnaire Findings 
 
 Analysis of the results 
 
The above graph (figure 4.15) reveals that the respondents opted for more than one choice.  
The majority of participants in the financial application rejection (who are 26), were rejected 
due to lack of collaterals, Fifteen (15) due to their character of entrepreneurship, Eleven (11) 
due to bad credit record, Seven (7) due to poor business plan and the other Seven (7) specified 
different options as; problem was their business location, lack of financial security and opted 
11
26
7
15
7
0
5
10
15
20
25
30
Bad credit record Lack of collateral Poor business plan Character of
entrepreneur
Other (please specify)
REASON FOR FINANCE APPLICATION 
REJECTION
72 
 
for none as their option which could mean they have never been rejected or never applied for 
finance.  
 
4.7.2 Institution (s) approached to finance your business 
 
 Results obtained 
 
Figure 4.16: Institution approached to finance your business 
 
 
Source: Question E4 of Questionnaire Findings 
 
 Analysis of the results 
 
The above graph (figure 4.16) reveals that participants opted for more than one choice.  The 
majority of participants in giving the institutions that they approached for financing their 
businesses, Thirty eight (38) approached commercial banks, Eleven (11) approached business 
partners, Three (3) approached Industrial Development Corporation (IDC), One (1) approached 
Khula Financial or Ntsika Enterprise Promotion Agency, One (1) approached National 
Empowerment Funds and the other Ten (10) specified different options as; Co-operative 
Incentive Scheme & GEP Grant Funding, family and my savings, GEP (Micro finance), Unjani 
Clinic & Imperial Group. Others opted for ‘None’ which may mean that they can finance their 
business themselves or the business required less funding.  The lowest score on government 
11
38
1
3
1
10
0
5
10
15
20
25
30
35
40
Business partner Commercial
banks
Khula Finance/
Nstika Enterprise
Promotion
agency
IDC National
Empowerment
Funds
Other (please
specify)
INSTITUTIONS APPROACHED FOR 
FINANCING YOUR BUSINESS
73 
 
agencies signifies that they have never approached these agencies for financial assistance or 
they do not know about them. The objective of finding out about role of the government 
agencies has been evaluated and it is noted for this research that is not visible. 
 
4.7.3 Indicate if you have not approach financial institution (s) above on Figure 4.16? 
 
 Results obtained 
 
Figure 4.17: If you have not approached financial institution above on (E4) question, 
indicate why? 
 
Source: Question E5 of Questionnaire Findings 
 
 Analysis of the results 
 
The above graph (figure 4.17) indicates why participants have not approached financial 
institution above on question (E4). Nine (9) participants (35%) had no knowledge of some 
entity mentioned above on (E4), Six (6) (23%) had funding through angel investor and another 
Six (6) (23%) find these financial entity inaccessible.  Five (5) (19%) received funding from 
friends or family and there were no participants who specified other reasons. 
No knowledge of 
entity, 9, 35%
Inaccessability, 6, 23%
Received from 
friens/family, 19%
Funding through angel 
investor, 6, 23%
Other (please specify), 
0, 0%
If you have not approached financial institution above on (E4) 
question, indicate why?
No knowledge of entity Inaccessability Received from friens/family
Funding through angel investor Other (please specify)
74 
 
4.7.4 Do you believe that entrepreneurs need training? 
 
 Results obtained 
 
Figure 4.18: Do you believe entrepreneurs need training? 
 
Source: Question E6 of Questionnaire Findings 
 
 Analysis of the results 
 
The above graph (figure 4.18) for participants in revealing about needing a training.  The 
majority of participants, sixty seven 67 (76%) agreed that they need training and Twenty (20) 
disagreed that they need no training.  One (1) participant did not respond or participate on this 
question.  
 
4.7.5 Indicate the field where you need training? 
 
 Results obtained 
 
Figure 4.19: Indicate which field do you need training? 
67, 76%
20, 23%
1, 1%
Do you think entrepreneurs need training?
Yes No Missing
75 
 
 
Source: Question E7 of Questionnaire Findings 
 
 Analysis of the results 
 
The above graph (figure 4.19) reveals that participants opted for more than one choice in 
selecting different fields for training needed. The majority of participants opted for both 
Business development and Finance training at Sixty five (65) and Sixty two (62) respectively, 
thirty five (35) opted for Mentorship and One (1) specified an option of needing ideas on how 
to expand, which was similar to the option of business development to select.  
 
4.6 RELIABILITY OF THE QUESTIONNAIRE IN MEASURING THE 
CONSTRUCTS  
 
The software used was IBM SPSS statistics version 25. Cronbach's alpha coefficient has been 
used, which recommends a value between 0.7 and 0.8 for the reliability and consistency of any 
items (Pallant, 2007:52).  A value of 0.7 is the internationally acceptable standard. The figure 
that is greater 0.90 value is very high reliable, the value between 0.8 – 0.9 is highly reliable, 
0.70 – 0.79 value is reliable, value between 0.6 – 0.69 is marginally reliable and figure less 
than 0.60 is unacceptable low reliability. The reliability for Section C & D of the questionnaire 
was determined as discussed on this study. A low coefficient can mean that the question asked 
is not properly formulated and does not correlate strongly. Table 4.5 below indicates the 
Cronbach Alpha coefficients of the constructs (see Table 4.5 below) measuring Motivational 
62
65
35
1
0
10
20
30
40
50
60
70
Finance training Business development Mentoring Other (please specify)
INDICATE WHICH FIELD THE TRAINING IS 
NEEDED?
76 
 
Factors, Obstacless that inhibit township entrepreneurs to start their businesses and Ostacles 
currently faced by entrepreneurs in running their businesses.  
 
 Results obtained 
 
Table 4.5: The Reliability Statistics in measuring Section C and D  
Motivational Factors Section 
Cronbach Alpha Cronbach Alpha on standardised items Number of items 
0.772 0.771 15 
Obstacles faced by Entrepreneurs 
0.848 0.851 13 
Cronbach Alpha Cronbach Alpha on standardised items Number of items 
Factors (obstacles) entrepreneurs are facing currently in running their businesses 
Cronbach Alpha Cronbach Alpha on standardised items Number of items 
0.800 0.802 11 
Source: Section C & D of the Questionnaire from statistics calculations 
 
 Analysis of the results 
 
A final alpha value of 0.772 was achieved for Section C (Motivational Sector) 15 variables 
had a reliable reliability value, 0.848 value.  Section D (Factors that inhibit township 
entrepreneurs to start businesses) 13 variables had a highly reliable value. Also for Section 
D (Obstacles currently facing entrepreneurs) 11 variables had also a highly reliable value 
of 0.800 for the study. From the results tabulated in Table 4.5, Cronbach’s alpha coefficients 
computed from the motivational factors scale returned a 0.772 obstacles faced by entrepreneurs 
scale returned a value of 0.848 and the factors (obstacles) entrepreneurs are facing currently 
scale returned a value of 0.800, all of them above the 0.7 minimum threshold (Pallant, 
2010:100).  
 
4.7 DISCUSSION AND RESULTS OF THE CONSTRUCTS  
 
 Results obtained 
 
Table 4.6: Reliability of the constructs measuring motivational climate 
77 
 
 
Source: Section C of the Questionnaire from statistics calculations 
 
 Analysis of the results 
 
Constructs, Confidence in the product/ service you offer with a mean value of 4.32, tested 
the highest in this study as motive for the respondent to start a business which is above that  
average mean value of 3.38 on the table above.  
 
The constructs, Need for independence, Desire for wealth, Self-fulfilment, Need a 
challenge, Insufficient family income scored all above the average mean value but below the 
highest mean value of 4.32 which are also good as motivational factors.  
 
The three constructs, Compatibility with family duties (mean value = 2.81), Redundancy 
(retrenchment) (mean value = 2.69) and Entered the family business) (mean value = 2.15), 
obtained the lowest average scores which are far below the average mean value which means 
these constructs can be regarded as having a least effects that motivates entrepreneuers to enter 
to business venture. 
  Mean 
Std. 
Deviation N 
Need for Independence 3.94 0.844 68 
flexible work schedule 3.16 1.002 68 
Need a challenge 3.71 0.793 68 
Self-fulfilment 3.91 0.805 68 
Develop hobby 3.46 0.871 68 
Role models 3.21 1.140 68 
Redundancy (retrenchment) 2.69 1.162 68 
Difficulty to find a job 3.35 1.255 68 
Dissatisfaction with salary job 3.25 1.028 68 
Compatibility with family duties 2.81 1.011 68 
Insufficient family income 3.71 1.023 68 
Desire for wealth 3.94 0.751 68 
Ensure high job security 3.32 0.953 68 
Entered the family business 2.15 1.136 68 
Confidence in the product/ service you offer 4.32 0.679 68 
TOTAL 3.38 0.963 68 
78 
 
 
 Results obtained 
 
Table 4.7: Reliability of the constructs measuring obstacles faced by township 
entrepreneurs to start businesses 
  Mean 
Std. 
Deviation N 
Lack of start-up capital 4.15 0.821 67 
Lack of business plan 3.12 1.135 67 
Awareness/access to business information 3.70 0.835 67 
Lack of timely business information 3.45 0.875 67 
Lack of role models 2.55 1.034 67 
Isolation from business network 3.13 0.886 67 
Lack of collateral 4.13 0.869 67 
Lack of business management skills 3.58 1.047 67 
Lack of education and training (in general) 3.52 1.146 67 
Lack of access to credit 4.28 0.831 67 
Lack of self-confidence 2.88 1.023 67 
Risk averse (fear of failure) 3.18 0.886 67 
Legislative focusing on entrepreneurship 3.25 0.859 67 
TOTAL 3.46 0.875 67 
Source: Section D of the Questionnaire from statistics calculations 
 
 Analysis of the results 
 
Constructs, Lack to obtain credit, Lack of start-up capital and Lack of collateral with a 
mean value of 4.28, 4.15 and 4.13 respectively tested the highest in this study as obstacles for 
township business owners to start businesses which is above the average mean value of 3.46.  
 
The constructs, Awareness/access to business information (mean value = 3.70), Lack of 
business management skills (mean value = 3.58) and Lack of education and training (in 
79 
 
general) (mean value = 3.52), scored all above the average mean value 3.46. These also 
represent or indicate good obstacles faced by entrepreneurs to start their businesses.  
 
The two constructs, Lack of self-confidence (mean value = 2.88) and Lack of role models 
(mean value = 2.55), scored far below the average mean value which means these constructs 
can be regarded as having least effects that the respondents’ selected as their choices. 
 
 Results obtained 
 
Table 4.8: Reliability of the constructs measuring obstacles you are currently facing in 
running your business 
  Mean Std. Deviation N 
Inability to secure Credit facility 3.84 0.994 67 
Family pressure (gender role expectations) 2.46 0.943 67 
Awareness/Access to business support 3.25 0.910 67 
Lack of timely business information 2.99 0.788 67 
Lack of Role models and support 2.27 0.898 67 
Isolation from business network 2.84 0.828 67 
Socio-cultural environment 2.85 0.875 67 
Lack of business management skills 2.75 0.975 67 
liquidity problems and other financial problems 3.81 0.892 67 
Gaining acceptance/respect of people (internally and external) 2.33 1.006 67 
No time for training/upgrading of skills 2.64 0.900 67 
TOTAL 2.91 0.909 67 
Source: Section D of the Questionnaire from statistics calculations 
 
 Analysis of the results 
 
80 
 
Constructs, Inability to secure Credit facility (mean value = 3.84), liquidity problems (mean 
value = 3.81) and Awareness/Access to business support (mean value = 3.25) tested the 
highest in this study as obstacles you are currently facing in running your business for this 
study which is above the average mean value of 2.91. 
 
The construct, Lack of timely business information (mean value = 2.99) scored above the 
average mean value but below the highest mean value of 2.91 which are also good as a factor 
that entrepreneurs are currently facing in running businesses.  
 
The other constructs, scored below the average mean of 2.91 and Lack of Role models and 
support (mean value = 2.27), obtained the lowest score which is far below the average mean 
value and these construct can be regarded as having a least effect on the respondents’ choices. 
 
4.8 ANALYSIS OF VARIANCE (ANOVA) 
 
Analysis of variance is a statistical technique used to analyse variations in response variables 
that are measured under conditions 67 defined by discrete factors (Martin & Larson, 2008:115). 
Analysis of variance is conducted with the intention to identify any general differences 
(variations) between groups on some variables. Analysis of variance is a widely used statistical 
technique among researchers due to its easy access in most statistical packages such as IBM-
SPSS Statistics. With the aim of addressing the third empirical objective, this study used 
ANOVA in order to determine the influence of some personal information variables such as 
highest education, previous occupation and years self-employed on the three identified factors 
of township entrepreneurship intentions namely, motivational factors, obstacles faced by 
entrepreneurs in starting their business and obstacles currently faced by entrepreneurs in 
running their business. The ANOVA results as provided in these sections. 
 
4.8.1 Three factors (ANOVA) by highest education 
 
 Results obtained 
 
Table 4.9: ANOVA – three factors by highest education 
  
Sum of 
Squares df 
Mean 
Square F Sig. 
Between Groups 0.403 3 0.134 0.566 0.640 
81 
 
Motivational 
Factors 
Within Groups 14.721 62 0.237     
Total 15.124 65       
Obstacles Faced Between Groups 2.482 3 0.827 2.573 0.062 
Within Groups 19.941 62 0.322     
Total 22.424 65       
Obstacles Currently Between Groups 1.378 3 0.459 1.694 0.177 
Within Groups 16.810 62 0.271     
Total 18.188 65       
Source: Survey data (2018) (Alpha at 0.05 level) 
 
 Analysis of the results 
 
Analysis of variance conducted by highest education on three factors of; Motivational Factors, 
Obstacles Faced and Obstacles Currently. The results indicates that there was no statistically 
significant differerence at p > 0.05 level between all three factors.  
 
4.8.2 Three factors (ANOVA) by previous occupation 
 
 Results obtained 
 
Table 4.10: ANOVA – three factors by previous occupation 
  
Sum of 
Squares df 
Mean 
Square F Sig. 
Motivational 
Factors 
Between Groups .915 3 .305 1.358 .264 
Within Groups 14.368 64 0.225     
Total 15.283 67       
Obstacles Faced Between Groups 3.312 3 1.104 3.643 0.017 
Within Groups 19.392 64 0.303     
Total 22.704 67       
Obstacles Currently Between Groups 3.231 3 1.077 4.522 0.006 
Within Groups 15.241 64 0.238     
Total 18.472 67       
Source: Survey data (2018) (Alpha at 0.05 level) 
 
 Analysis of the results 
 
82 
 
Analysis of variance conducted by Previous Occupation on three factors; Motivational Factors, 
Obstacles Faced and Obstacles Currently. There was no statistically significant differerence at 
p > 0.05 level on motivational factors.  There was statically significant difference at p < 0.05 
level on obstacles faced (0.017) and obstacles currently (0.006). 
 
4.8.3 Three factors (ANOVA) by Years of self-employed 
 
 Results obtained 
 
Table 4.11: ANOVA – three factors by Years of self-employed 
  
Sum of 
Squares df 
Mean 
Square F Sig. 
Motivational 
Factors 
Between Groups 0.658 3 0.219 0.960 0.417 
Within Groups 14.625 64 0.229     
Total 15.283 67       
Obstacles Faced Between Groups 1.928 3 0.643 1.980 0.126 
Within Groups 20.776 64 0.325     
Total 22.704 67       
Obstacles Currently Between Groups 3.644 3 1.215 5.243 0.003 
Within Groups 14.828 64 0.232     
Total 18.472 67       
Source: Survey data (2018) (Alpha at 0.05 level) 
 
 Analysis of the results 
 
ANOVA conducted by Self- employed on three factors; Motivational Factors, Obstacles Faced 
and Obstacles Currently.  There was no statistically significant differerence at p > 0.05 level 
on motivational factors (0.417) and  obstacles faced factors (0.126).  There was statically 
significant difference at p < 0.05 level on obstacles currently (0.003). 
 
4.9 CORRELATION ANALYSIS 
 
According to Ghauri & Gronhaug (2010:175), correlation analysis is a statistical procedure that 
examines the strength of a linear relationship between two variables. This study used the 
Pearson correlation coefficient (r) in order to measure the degree of linear association, thereby 
establishing the relationship among the three (3) factors namely, highest education, previous 
83 
 
occupation and years of self-employment.  Results were ranging from r = 0.013 to r = 0.620 at 
p <0.01. The results indicated that there was a positive linear inter-factor association. Table 
4.12 below provides a summary of the correlation matrix for this research study. Table  4.13 
below shows the guidelines that can be utised to interpret the strength of relationship between 
variables. 
. 
 
 Results obtained 
 
Table 4.12: Correlation matrix summary 
Spearman’s rho Highest 
education 
Previous 
Occupation 
Years of self-
employment 
 Highest 
education 
Correlation 
Coefficient 
1.000 .620** 0.059 
Sig. (2-tailed)  0.000 0.634 
N 68 68 68 
Previous 
Occupation 
Correlation 
Coefficient 
.620** 1.000 0.013 
Sig. (2-tailed) 0.000  0.918 
N 68 68 68 
Years of self-
employment 
Correlation 
Coefficient 
0.059 0.013 1.000 
Sig. (2-tailed) 0.634 0.918  
N 68 68 68 
Source: Survey data (2018)  
 
Table 4.13: Strength of relationship between variables 
Size of (r)  Interpretation of (r) 
± (0.5 to 1.0)  Strong relationship  
± (0.3 to 0.5)  Moderate relationship  
± (0.1 to 0.3)  Weak relationship  
± (0.0 to 0.1)  Very weak or no relationship  
Source: Turkmen (2013:1011) 
 
84 
 
 
 Analysis of the results 
Table 4.12 indicates that highest education suggested a strong relationship in comparing with, 
previous occupation (r= 0.620; p <0.01) (See Table 4.13 for checking results of (r)).  
 
Highest education showed a very weak relationship relationship with years of self-
employment (r= 0.059 p<0.634) (See Table 4.13 for checking results of (r)).  
 
Previous occupation had a very weak relationship with years of self-employment (r=0.013, 
p<0.918) (See Table 4.13 for checking results of (r)).   
 
Years of self-employment also had a very weak relationship with previous occupation (r= 
0.013, p<0.918) (See Table 4.13 for checking results of (r)). 
 
4.10 ANALYSIS OF T-tests ON LEGAL STATUS OF YOUR BUSINESS 
 
The t-test has two variants: the t-test for independent samples and the t-test for related (or 
‘paired’) samples. An effect size can lie between 0 to 1 (Cohen et al., 2007:521). In using 
Cohen’s d-values, the following measurements were deemed acceptable as shown on the Table 
4.14 below: 
 
Table 4.14: Cohen’s d- values measurements 
The effect Size Measurement 
0 – 0.20 Weak effect 
0.21 – 0.50 Modest effect 
0.51 – 1.00 Moderate effect 
> 1.00 Strong effect 
Source: Cohen et al. (2007:543) 
 
The selected questions were from section B (B2) and Section E (E6) of the questionnaire and 
for the purpose of the analyses, these variables are handled as if they were measured on a 
continuous scale and t-tests are conducted on them  (See Table 4.15 and 4.16 below).  
 
 Results obtained 
85 
 
 
Table 4.15: Relationship between variables measuring the legal status of your business 
and the variables 
Variables Constructs N Mean Std. Deviation Std. Error 
Mean 
Effect Size 
Motivational 
Factors 
Registered 56 3.336 0.492 0.065 0.67 
Not 
registered 
12 3.666 0.277 0.079 
Obstacles 
inhibit 
factors 
Registered 56 3.410 0.573 0.076 0.24 
Not 
registered 
12 3.564 0.632 0.182 
Currently 
obstacles 
Registered 56 2.773 0.465 0.062 1.59 
Not 
registered 
12 3.515 0.320 0.092 
Source: Survey data (2018) 
 
 Analysis of the results 
 
From the results tabulated in Table 4.15, the outcome of the d-values revealed effect of results 
between the measurements of the business legal status factor with regards to the variables as 
per Table 4.15. Following variables obtained a d-values result; Motivational Factor (d = 0.67) 
measuring a moderate effect, obstacles inhibit factors (d = 0.24) measuring a weak effect, and 
currently obstacles (d = 1.59) measuring a strong effect for the constructs of Registered and 
Not Registered. 
 
4.11 ANALYSIS OF T-tests ON ANY FORM OF TRAINING FROM 
GOVERNMENT/PRIVATE SECTOR 
 
 Results obtained 
 
Table 4.16: Relationship between variables measuring any form of training from 
government/ private sector received and the variables 
Variables Constructs N Mean Std. Deviation Std. Error 
Mean 
Effect Size 
86 
 
Motivational 
Factors 
Yes 21 3.438 0.418 0.091  
0.12 No 47 3.375 0.504 0.073 
Obstacles 
inhibit 
factors 
Yes 21 3.326 0.651 0.142  
0.25 No 47 3.487 0.548 0.080 
Currently 
obstacles 
Yes 21 2.65 0.476 0.103 0.70 
No 12 3.515 0.320 0.092 
Source: Survey data (2018) 
 
 Analysis of the results 
 
From the results tabulated in Table 4.16, the outcome of the d-values revealed effect results 
between the measurements of the any form of training from government and private sector 
factor with regards to the variables as per Table 4.16. Following variables obtained a d-values 
result; Motivational Factor (d = 0.12) measuring a weak effect, obstacles inhibit factors (d = 
0.25) measuring a modest effect and currently obstacles (d = 0.70) measuring a moderate 
effect for the constructs of Yes and No. 
 
4.12 SUMMARY OF RESEARCH FINDINGS 
 
From the findings in this study indicate that township entrepreneurship can create kind of jobs. 
The role of support can increase economic activities in the townships and the support could be 
from private and government sector. Majority of respondents need financial and business 
development training as means of support. Township entrepreneurs still find it difficult when 
they seek to find financial applications from financial institutions.  Some respondents have 
received training skill related to the business they currently operate. The training may either 
comes from previous occupational experience, vocational colleges or any other institutions and 
also from any type of agency. Significant amount of entrepreneurs, seems not to benefit from 
the workshops offered by the provincial or local municipality and any assistance offered by the 
government agencies.  
 
This chapter reported and interpreted the findings of the role of support and stimulating the 
township economy and informal sector in Soweto. Entrepreneurial activities were discussed 
for this township and factors that hinders growth or support growth activities.  Results were 
87 
 
presented, discussed and integrated. The next chapter five (5) discusses the results, conclusion 
and the recommendations. 
 
 
  
88 
 
CHAPTER FIVE 
SUMMARY AND THE STUDY CONCLUSION 
 
5.1 INTRODUCTION 
 
The research aimed at assessing the state of support for entrepreneurship in Soweto through 
entrepreneurial activities in the township. Secondly, the study focused on understanding the 
role of supporting and also stimulating the township economy and informal sector. This chapter 
provides the overall conclusion of the empirical research. This study case focused directly to 
the entrepreneurs in the township from Soweto where entrepreneurial activities were monitored 
and information gathered with the aim to explore factors and obstacles that influences or 
hinders growth of township economy. To gain insight into the entrepreneurial activities based 
on the research problem study, data was sourced through questionnaires from Sixty eight (68) 
township entrepreneurs and through literature study in Chapter 2 which was compared to the 
data gathered in Chapter 4. 
 
The recommendations will be followed by the conclusions drawn from this research and will 
be accompanied by the recommendations for future research work. 
 
5.2 MAIN FINDINGS AND PURPOSE OF THIS CASE STUDY 
 
The contribution of the support role and stimulation will contribute to the change in 
entrepreneurial activities, contribution to employment and improved quality life of the 
township residents through promotion of township economy and economic participation. The 
informal economy provides opportunities for employment and entrepreneurship. 
The findings were aimed at covering core characteristics of their businesses before exploring 
how the entrepreneurs had started their businesses, any kind of support received from other 
organisations, what sort of barriers stood in their businesses activities, and immediate 
interventions required to improve their business situations. Main purpose of this section is to 
provide the findings of the research study that are in accordance with the five empirical 
objectives as identified in Chapter 1 of this research survey. The first and second empirical 
objectives were to identify the outcomes role of support and major challenges facing township 
entrepreneurs, issues that affect township entrepreneurship development and challenges that 
hinders the growth of township economy. From the research the townships entrepreneurs are 
89 
 
facing more challenges of taking their small businesses to another greatest level that generate 
broader economic benefits. Firstly, on the legal status of the business there were a number of 
businesses that were not registered and could not benefit from advantages and protection as 
compare to registered businesses.  
 
Secondly, another challenge observed from the survey is that large amount of entrepreneurs 
has never received any kind or form of training as proof of support from either government or 
other organisation. Thirdly, another challenge that hinders the growth of township economy as 
part of this survey obstacles dimension that inhibit township entrepreneurs to start their own 
business was the lack to obtain credit, lack of start-up capital and lack of collateral as all these 
scored high. Skills and training scored second behind the financial challenges. Fourthly, when 
dealing with factors that currently facing township entrepreneurs, constructs which scored high 
were inability to secure credit facility, liquidity problems and awareness or access to business 
support. These outcomes confirms the role of support and stimulating the township economy 
as a main research problem statement. Access to finance is also problematic as mentioned on 
the World Bank study to township residents, including its entrepreneurs (Mahajan, 2014:9). 
 
The third, fourth and fifth empirical objectives were about identifies monitoring and 
instruments that check the outcomes of this project achievements, identify effectiveness of 
policies and strategies that promotes economic development and to examine through the case 
study that township economy activities does creates jobs as proclaimed. The project 
achievements of this research on township economy is to prove and compare as from the 
research that small businesses (SMME’s) do create employments and contribute to economy. 
The results that were obtained in the study revealed that small businesses in the township do 
create employment as part of township economy activities.  
 
The majority of businesses from this survey found that 44% of businesses recorded having 3 – 
5 employees. Role of government is to create environment that enables township businesses a 
possibility to flourish and be able to access market. Provincial government of Gauteng 
responded to this challenges by positioning out strategies working on the promises to channel 
resources and produce opportunities for micro-business enterprises policies and programmes 
that supports the development of SMME’s. Charman (2017:2) mentioned that the Gauteng 
provincial government has already started with the strategic of revitalisation of the Township 
Economy’ (2015). In Gauteng province, there is an institution Gauteng Enterprise Propeller 
(GEP) that  provide both financial and non-financial support for the benefit of SMMEs that 
90 
 
was established though the Gauteng Enterprise Propeller Act (5/2005) (South Africa, 2005).  
Other legal forms of business registration are with the South African Companies Act. 
 
5.3 LIMITATIONS OF STUDY 
 
The study sample could only focus on the specific township of Gauteng Province as it cannot 
deal with every township in the entire Gauteng province.  The study focused mainly on the idea 
of township economy, township entrepreneurship and informal economy as consideration for 
this research and within the legal framework of both the province and the country. The 
questionnaire was also broad and general and also covered the selected sample township 
business community of Soweto. 
 
5.4 CONCLUSION AND RECOMMENDATION FOR THE STUDY 
 
From this research a total number of 68 entrepreneurs were interviewed who completed the 
questionnaires and the majority who participated indicated these major challenges which 
conform to the problem statement of this research and its objectives: 
 
 Taking their small businesses to another level that generate broader economic benefits. 
 Legal status of their business that were not registered and could not benefit from 
advantages that the provincial government, government agencies and other institutions 
are offering. 
 Training as proof of support from either government or other organisation as majority 
of participants indicated that Financial Training and Business development are key on 
their needs. 
 Absence of obtaining the credit, lack of capital as start-up and unavailability of 
collateral on obstacles that inhibit entrepreneurs to start their own business enterprises. 
 Liquidity problems and awareness or access to business support on factors that 
entrepreneurs are currently facing in their running businesses. 
 
Recommendation 1: Although mentorship score lower in comparing with finance training and 
business development but on the point of taking their small businesses to another level, 
training, support and stimulation of township entrepreneurship so that it can generate broader 
economic benefits for the entrepreneurs. The provincial government and other organisation 
91 
 
should create the environment that is helpful to the township business and entrepreneurial 
developments. Business owners need to easily access an number of support programmes such 
as sectorial incubators, business hubs, industrial parks, business parks, straining and learning 
centres, public-private partnerships programmes, and collaboration with government agencies, 
that focuses on the expansion of training and workplace programmes in townships that 
promotes entrepreneurship development in the township. 
 
Recommendation 2: There are benefits  when the business has a registered legal status as it 
can be regulated, guided and can operate under legal framework applicable to small businesses 
as stipulated under provincial business laws.  Businesses belonging under organised business 
board sector, benefit from information that can result in their business to support, growth and 
sustainability from government, government agencies and other institutions. A registered 
business is recommended so that the government and government agencies will find it easy to 
support them. Government needs to simplify regulations for township enterprises in relation to 
licensing, permits or registration of the business enterprises. Get rid of bureaucracy and red 
tapes which are not cost effective in promoting township entrepreneurship. 
 
Recommendation 3: Financial Training and Business development are key on their support 
needs, by providing training, technical assistance, and project support to support for township 
economic enterprises. Government should form a partnership with organisations that provides 
training and mentorships. There should be more financial entrepreneurial targeted campaigns 
and seminars that are at the disposal for township entrepreneurs to easily access with full range 
of financial tools. 
 
Recommendation 4: Lack to obtain credit, lack of capital as start-up and collateral on obstacles 
that impede entrepreneurs from the township to establish their own businesses. There is a need 
of initiatives that focuses on addressing the difficulties experienced by the township businesses 
in accessing external finance, either through a bank or any other financial institutions. 
Government need initiatives that are expected to enhance financial access for businesses in the 
township. Type of business, business location and collateral are part of things that participants 
pointed out as outcomes of this research and these outcomes affects the township entrepreneurs 
in accessing credit from financial institutions. Government guarantees or alternative finance 
mechanisms need to be developed for financial institutions to give township entrepreneurs 
access to credit as long as the business had been pre-evaluated that it has potential to grow and 
be sustainable. 
92 
 
 
Recommendation 5: Liquidity problems and awareness or access to business support on 
factors that entrepreneurs are currently facing in their running businesses, financial 
management training is required as it was evident from this research. Financial education and 
training will provide entrepreneurs with knowledge with liquidity problems. Managerial 
challenges are often associated with the lack of skills by the entrepreneur to operate a business 
venture. 
 
5.5 RECOMMENDATIONS FOR FUTURE STUDIES 
 
This study has shown that there are many challenges and constraints facing township 
entrepreneurs that need to be overcome, challenges such as historical background of township 
location, aging infrastructure, lack of investing to townships, overpopulation, lack of resources, 
informality and regulation, non-compliance to payment of rate and taxes and low employment 
levels. 
These are some of the recommended future studies:  
 There is a need to strengthen capacity building programmes on policies that aims to 
assist and promote the development of township economy so that township 
entrepreneurs could have access to market that they supply. 
 A study that focuses on addressing the challenges experienced by township businesses 
in accessing the mainstream finances assistance and the development of other 
alternative means to access credit. 
 Future research should focus on how to generate and deliver knowledge that would 
allow entrepreneurs to have access to information that would support its business 
activities easy and faster without challenges. 
Collection of municipal rates in order to improve infrastructure and the delivery of services as 
part of promoting township economy as the municipal have challenges in persuading township 
residents to pay rates that are due. There is a need for economic infrastructure support and roll-
out for enterprise development in the townships. 
 
5.6 SUMMARY 
 
The second chapter literature review and empirical study conducted indicated that there were 
previously researched topics that support the research problem statement and there have been 
several ongoing studies on entrepreneurship. It has become clear from the literature review that 
93 
 
being a successful entrepreneur involves knowledge, skill and determination and 
entrepreneurship is regarded as a tool that is possible in job creation. It is be seen from this 
research from the participants that small businesses do create employment as it was also 
mentioned from the literature review.  
 
This final chapter, resulted in drawing up findings, formulating of recommendations in 
supporting township economy in Soweto and identified areas for future research. 
 
  
94 
 
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ANNEXURE A: STUDY QUESTIONNAIRE 
 
ENTREPRENEURSHIP QUESTIONNAIRE 
 
PLEASE NOTE: 
This questionnaire must only be completed by entrepreneurs of Soweto in 
Gauteng Province. 
 
 
 
All information will be treated as STRICTLY CONFIDENTIAL and will only be used for 
academic purposes. 
 
Instructions for completion: 
 
1. The selected entrepreneurs from SOWETO as a TOWNSHIP must complete this 
questionnaire. 
2. Please answer the questions as objectively and honestly as possible. 
3. Place a cross (x) in the space provided at each question which reflects your 
answer the most accurately. Use the following key: 1 = Strongly disagree; 2 = 
Disagree; 3 = Neutral view; 4 = Agree; 5 = Strongly agree. 
 
  
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B7 I am aware of the support and interventions from 
the government and other groups in promoting 
township entrepreneurship. 
1 2 3 6 5 
 
It is essential you indicate your choice clearly with a pen. 
 
 
4. Where asked for comments or to express your own opinion, keep answers short 
and to the point. 
5. Please answer all the questions, as this will provide more information to the 
researcher so that an accurate analysis and interpretation of data can be made. 
 
 
Thank you for your co-operation. We hope that you will find the questionnaire 
interesting and stimulating. 
 
 
 
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SECTION A: PERSONAL INFORMATION 
Take note that all your responses will be treated confidentially. We appreciate your help in 
providing this important information. 
 
Mark the applicable block with a cross (X). Complete the applicable information. 
 
A1 Indicate your highest academic qualification.  
 Lower than matric  (01) 
 Matric  (02) 
 Certificate  (03) 
 Diploma (Technical College or Technikon/University of Technology)  (04) 
 University degree  (05) 
 Postgraduate degree  (06) 
 
A2 Indicate your past experience before self-employment (occupational background). 
 Unemployed  (01) 
 Self-employed (owned a business)  (02) 
 Worker (administration, clerk, secretary, cashier)  (03) 
 Supervisor (first-line management)  (04) 
 Middle management  (05) 
 Top/Senior management  (06) 
 
A3 Indicate the number of years that you are self-employed. 
 Less than one (1) year  (01) 
 1 –3 years  (02) 
 4 – 5 years  (03) 
 6 – 10 years  (04) 
 More than 10 years. (Please specify)  
 
 (05) 
 
107 
 
SECTION B: BUSINESS INFORMATION 
 
Mark the applicable block with a cross (X). Complete the applicable information. 
 
B1 In which economic sector does your business operate?  
 Retail trade  (01) 
 Wholesale trade  (02) 
 Manufacturing  (03) 
 Construction  (04) 
 Transport/distribution  (05) 
 Accommodation and restaurant (guest houses, hotel)  (06) 
 Food industry  (07) 
 Agriculture/forestry/fishing  (08) 
 Services (Please specify the type of service) 
 
 (09) 
 Other: (Please specify) 
 
 (10) 
 
B2 Indicate the legal status of your business (form of business ownership). 
 Registered  (01) 
 Not registered  (02) 
 Other: (Please specify) 
 
 (03) 
 
B3 For how long has your business been in operation? 
 Please specify:  
 
 
B4 Indicate your path to business ownership. 
 Started (founded) the business  (01) 
 Purchased the business  (02) 
 Joined the family business  (03) 
 Inherited the business (from the family)  (04) 
 Other: (Please specify)  
 
 (05) 
 
 
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B5 Indicate your source of start-up funding. 
 Personal savings  (01) 
 Borrowed or gifted (donated) from relative or friend  (02) 
 Government funding   (03) 
 Sold previous business  (04) 
 Commercial bank  (05) 
 Other: (Please specify) 
 
 (06) 
 
B6 Indicate your business premises (from where does your business operate?) 
 Home  (01) 
 Outlying business area (business hubs)  (02) 
 Industrial area  (03) 
 Agriculture land  (04) 
 Other: (Please specify) 
 
 (05) 
 
 
 
 
 
 
B9 Have you ever received any form of training from the government? Yes 
(01) 
No 
(02) 
 If no, where did you get training from? (Please specify – i.e. other private group, self-
education, or learned from family business). 
 
 
 
 
B10 Is the present business the first business that you own? Yes 
(01) 
No 
(02) 
 If no, please indicate what happened to the business previously owned.   
 Went out of business  (03) 
 Still successful  (04) 
 Sold off  (05) 
 Other (Please specify): 
 
 
 (06) 
B7 How many permanent employees are employed by your business? 
 Myself 0 - 2  3 - 5 6 - 10 10 - 20 > 20 
 (01) (02) (03) (04) (05) (06) 
109 
 
SECTION C: MOTIVATIONAL FACTORS 
 
The purpose of this section is to determine which factors drove entrepreneurs to enter 
into their own business ventures. 
 
Indicate to what extents do you agree or disagree with the statements. Indicate your motive to start 
your own business on the scale. Mark the applicable block with a cross (X). 
 
  
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C1 The need for independence  1 2 3 4 5 
C2 Need for flexible work schedule 1 2 3 4 5 
C3 Need for a challenge 1 2 3 4 5 
C4 Self-fulfilment 1 2 3 4 5 
C5 To develop my hobby 1 2 3 4 5 
C6 Role models and other people’s influences (friends & family members) 1 2 3 4 5 
C7 Redundancy (lost your job, retrenchment) 1 2 3 4 5 
C8 Difficulty finding a job 1 2 3 4 5 
C9 Dissatisfaction with salaried jobs (job/ career frustration) 1 2 3 4 5 
C10 Compatibility with family duties 1 2 3 4 5 
C11 Insufficient family income 1 2 3 4 5 
C12 Desire for wealth 1 2 3 4 5 
C13 Ensure high job security 1 2 3 4 5 
C14 Entered the family business 1 2 3 4 5 
C15 Confidence in the product/service offered. 1 2 3 4 5 
C16 Others (Please specify) 
 
 
 
 
 
  
110 
 
SECTION D: OBSTACLES FACED BY ENTREPRENEURS 
 
The purpose of this section is to accumulate a body of knowledge of barriers as well 
as challenges that are faced by current entrepreneurs in entering and running their 
own business ventures successfully. 
 
Indicate to what extent do you agree or disagree with the statements concerning the 
obstacles/barriers for township entrepreneurs to start their own business.  
Mark the applicable block with a cross (X). 
 
  
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FACTORS (OBSTACLES) THAT INHIBIT TOWNSHIP ENTREPRENEURS TO START THEIR OWN 
BUSINESS 
D1 Lack of start-up capital (finance) 1 2 3 4 5 
D2 Lack of proper business plan  1 2 3 4 5 
D3 Awareness/ Access to business support  1 2 3 4 5 
D4 Lack of timely business information 1 2 3 4 5 
D5 Lack of role models 1 2 3 4 5 
D6 Isolation from business network 1 2 3 4 5 
D7 Lack of collateral 1 2 3 4 5 
D8 Lack of business management skills 1 2 3 4 5 
D9 Lack of education and training (in general) 1 2 3 4 5 
D10 Lack of access to credit facility  1 2 3 4 5 
D11 Lack of self-confidence 1 2 3 4 5 
D12 Risk averse (great fear of failure) 1 2 3 4 5 
D13 Legislative (lack of focussed entrepreneurship policies from 
regional municipalities or government) 
1 2 3 4 5 
D14 Other (Please specify) 
 
 
 
 
 
 
  
111 
 
Indicate to what extent do you agree or disagree with the statements concerning the 
obstacles/barriers that you are currently experiencing in your own business.  
Mark the applicable block with a cross (X). 
 
  
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FACTORS (OBSTACLES) YOU ARE FACING CURRENTLY IN RUNNING YOUR BUSINESS 
D15 Inability to secure credit facility 1 2 3 4 5 
D16 Family pressures (gender-role expectations) 1 2 3 4 5 
D17 Awareness/ Access to business support 1 2 3 4 5 
D18 Lack of timely business information 1 2 3 4 5 
D19 Lack of role models and support 1 2 3 4 5 
D20 Isolation from business network 1 2 3 4 5 
D21 Socio-cultural environment  1 2 3 4 5 
D22 Lack of business management skills 1 2 3 4 5 
D23 Liquidity problems and other financial problems 1 2 3 4 5 
D24 Gaining acceptance/respect of people (internally and externally) 1 2 3 4 5 
D25 No time for training/upgrading of skills 1 2 3 4 5 
D26 Other (Please specify) 
 
 
 
 
112 
 
SECTION E: TRAINING AND FINANCING NEEDS OF 
ENTREPRENEURS 
 
Mark the applicable block with a cross (X). Complete the applicable information. 
 
E1 Have you ever been supported, trained or developed by either a government 
agency or the private sector (non-governmental group)? 
Yes 
(01) 
N
o 
(0
2) 
(03) If yes, name the institutions you know: 
 
 
 Indicate the type of training that you received. 
 Technical skills (i.e. hand crafting)  (04) 
 Communication skills  (05) 
 Accounting skills  (06) 
 Management skills  (07) 
 Technological skills (computers)  (08) 
 Other: (Please specify) 
 
 (09) 
 
E2 Which of the following obstacles have you experienced in the application process for financial 
assistance? 
 Complexity of application forms  (01) 
 Too many forms to fill in  (02) 
 Time frame of feedback was long  (03) 
 Ability of banker to inform and assist in the entire application process  (04) 
 Lack of collateral/ security  (05) 
 Other: (Please specify) 
 
 
 (06) 
 
E3 If your application was rejected, what was the reason/s for the rejection? 
 Bad credit record   (01) 
 Lack of collateral  (02) 
 Poor business plan  (03) 
 Character of entrepreneur  (04) 
 Other: (Please specify) 
 
 
 (05) 
113 
 
 
 
 
E4 Which institutions did you approach to finance your business? 
 Business partners   (01) 
 Commercial banks   (02) 
 Khula Finance/ Ntsika Enterprise Promotion agency  (03) 
 Industrial Development Corporation  (04) 
 National Empowerment Funds  (05) 
 Other: (Please specify) 
 
 
 (06) 
 
E5 If you have not approached any of the above (E4), please indicate why: 
 No knowledge of entity   (01) 
 Inaccessibility  (02) 
 Received funding from friends and/or family  (03) 
 Funding through Angel investor or Venture capitalist  (04) 
 Other: (Please specify) 
 
 
 (05) 
 
E6 Do you believe entrepreneurs need training? 
 Yes  (01) 
 No  (02) 
 
E7 If you selected Yes above (E6), please indicate in which field the need for training exists 
 Finance training  (01) 
 Business development   (02) 
 Mentoring  (03) 
 Other (Please specify) 
 
 (04) 
 
 
 
 
 
THANK YOU FOR YOUR TIME. 
114 
 
 
ANNEXURE B: LANGUAGE EDITOR’S CONFIRMATION LETTER  
 
STEPHANUS POSTMA 
 
TRANSLATOR / EDITER   24 VILLA HEIDE  
BA UED                                                         FLIMIEDA 
REGISTERED AT SATI                                                KLERKSDORP 
(NR 1001334)  2570 
   
Tel 018 4687680  P O BOX 6716 
Cell 083 4096252  FLAMWOOD 
faniepostma@gmail.com                                         2572 
 
22 November 2018    
 
Student number: 27830497 
 
 
I confirm that I did a language edit of S Kubone’s Mini dissertation. 
 
Role of supporting and stimulating the township economy 
and informal sector in the Gauteng townships 
 
I was instructed by the student to just edit chapters 1 to 5 
       
   
                      
I am registered at SATI (South African Translation Institute) Nr 
1001334. 
 
S Postma