Microfinance and women's entrepreneurship In South African townships

Bramwell Kundishora Gavaza; Gift Donga; Justice Ngonidzashe  Muchineripi

doi:10.36096/ijbes.v7i4.872

Authors

Bramwell Kundishora Gavaza Walter Sisulu University https://orcid.org/0000-0002-3684-5166
Gift Donga University of Fort Hare,South Africa
Justice Ngonidzashe Muchineripi Walter Sisulu University https://orcid.org/0000-0002-8058-731X

DOI:

https://doi.org/10.36096/ijbes.v7i4.872

Keywords:

Microfinance; Women entrepreneurship; Township economy; South Africa.

Abstract

In emerging economies, women entrepreneurs play a critical role in job creation and social and economic progress, particularly in townships. However, the specific context of women's township entrepreneurship has mainly been overlooked in South African research, which remains fragmented and lacks cohesive insights. This study explores the role of microfinance in fostering women's township entrepreneurship within a South African context. Research has repeatedly demonstrated that microfinance institutions hold a vital position in the economic advancement of women, resulting in elevated female participation in business activities and ultimately fostering their overall empowerment. The investigation focused on women entrepreneurs within the marginalised township of Mdantsane, located in the Eastern Cape Province of South Africa. Using a qualitative approach, the study involved in-depth interviews with 15 women entrepreneurs selected through purposive sampling. The data was analysed using thematic analysis, revealing five key themes: empowerment through financial independence, building entrepreneurial skills and networks, increased business volume and turnover, overcoming socioeconomic barriers, and reduction in gender inequalities. The findings suggest that an intervention mapping approach is crucial for policymakers to design tailored microfinance programs for women entrepreneurs in township economies. This approach involves a systematic process that begins with a thorough assessment of the specific financial needs and challenges faced by women in these communities, followed by the development of targeted interventions that address those needs.

Downloads

Download data is not yet available.

References

Abutaber, T. A., Bzur, A. E. A., Odeh, M. H., Alathamneh, M., Okaily, M. A., & Afaneh, M. K. (2021). The effect of corporate governance indicators on enhancing the financial performance of industrial listed companies on the Amman Stock Exchange. Accounting, 7, 415–422. DOI: https://doi.org/10.5267/j.ac.2020.11.009

Alkurdi, A., Hamad, A., Thneibat, H., & Elmarzouky, M. (2021). Ownership structure’s effect on financial performance: An empirical analysis of Jordanian listed firms. Cogent Business & Management, 8, 1–21. DOI: https://doi.org/10.1080/23311975.2021.1939930

Abebe, A., & Kegne, M. (2023). The role of microfinance institutions in women’s entrepreneurship development. Journal of Innovation and Entrepreneurship, 12(1), 17. DOI: https://doi.org/10.1186/s13731-023-00285-0

Abeysiriwardana, P. C., Jayasinghe-Mudalige, U. K., Kodituwakku, S. R., & Madhushani, K. B. (2022). Intelligently driven performance management: An enabler of real-time research forecasting for innovative commercial agriculture. SN Social Sciences, 2(9), 168. DOI: https://doi.org/10.1007/s43545-022-00484-8

Akisimire, R., Abaho, E., & Basalirwa, E. M. (2015). Microfinance and entrepreneurial empowerment of women: The Ugandan context. International Journal of Economics, Commerce and Management, 3(1), 1–11.

Akpuokwe, C. U., Chikwe, C. F., & Eneh, N. E. (2024). Leveraging technology and financial literacy for women’s empowerment in SMEs: A conceptual framework for sustainable development. Global Journal of Engineering and Technology Advances, 18(3), 20–32. DOI: https://doi.org/10.30574/gjeta.2024.18.3.0041

Barua, U., & Khaled, A. F. M. (2023). The Grameen Bank microfinance model in the Global North: Processes, transfer intermediaries and adoption. Journal of Comparative Policy Analysis: Research and Practice, 25(5), 546–563. DOI: https://doi.org/10.1080/13876988.2023.2223542

Bernard, D. K. (2015). Microfinance services: Facilitating entrepreneurial success of poor women. Journal of Review of Contemporary Business Research, 4(2), 57–66. DOI: https://doi.org/10.15640/rcbr.v4n2a5

Bishwakarma, M. B. (2017, April). Social inclusion through microfinance: A bottom up approach. In International Conference on ‘Re-imagining Caste, Religion and Social Justice in South Asia’ (pp. 28–30). Brandeis University.

Cheston, S., & Kuhn, L. (2002). Empowering women through microfinance. Draft, Opportunity International, 64, 1–64.

Chiloane-Tsoka, E. (2013). An investigation into the financial barriers facing women entrepreneurs operating in SMMEs in Tshwane, South Africa. Journal of Economic and Financial Sciences, 6(2), 347–358. DOI: https://doi.org/10.4102/jef.v6i2.264

Chozarira, T. L., Sakarombe, U., & Chagwedera, E. (2023). Financial inclusion and women-led small and medium enterprises (SMEs) performance during COVID-19 in Chipadze, Bindura Town. Eurasian Journal of Economic and Business Studies, 67(1), 97–108. DOI: https://doi.org/10.47703/ejebs.v1i67.221

Dawson, H. J. (2021). “Making plans through people”: The social embeddedness of informal entrepreneurship in urban South Africa. Social Dynamics, 47(3), 389–402. DOI: https://doi.org/10.1080/02533952.2021.1909949

de Almeida Bizarria, F. P., Barbosa, F. L. S., Rodrigues, D. M. A., & Barbosa, L. O. (2022). From need to power, entrepreneurship in G10 favelas—(Re) knowledge and intelligibility of alternative social practices. Revista De Gestão Social E Ambiental, 16(3), 1–19. DOI: https://doi.org/10.24857/rgsa.v16n3-003

Derera, E., Chitakunye, P., O’Neill, C., & Tarkhar-Lail, A. (2014). Gendered lending practices: Enabling South African women entrepreneurs to access start-up capital. Journal of Enterprising Culture, 22(3), 313–330. DOI: https://doi.org/10.1142/S0218495814500137

Dharmawardhana, T., Weerakkody, R., Buhary, R., Rathnayake, D., & Dissanayaka, A. (2019). Access to and utilization of microfinance by rural poor in Uva Province. Hector Kobbekaduwa Agrarian Research and Training Institute.

Feenstra, T. M., Mak-van der Vossen, M. C., Schijven, M. P., & van Dijkum, E. J. N. (2023). Digital training resources in the Dutch surgical residency curricula and the perspectives of residents: A thematic analysis of resident interviews. Journal of Surgical Education, 80(3), 457–467. DOI: https://doi.org/10.1016/j.jsurg.2022.10.015

Freire, P. (1970). The adult literacy process as cultural action for freedom. Harvard Educational Review, 40(2), 205–225. DOI: https://doi.org/10.17763/haer.40.2.q7n227021n148p26

Kabeer, N. (1999). Resources, agency, achievements: Reflections on the measurement of women’s empowerment. Development and Change, 30(3), 435–464. DOI: https://doi.org/10.1111/1467-7660.00125

Gavaza, B. K. (2024). Testing a performance model: The role of fear of failure, entrepreneurial cognitions and behaviour amongst township entrepreneurs (Doctoral dissertation). University of Fort Hare, East London, Eastern Cape.

Gavaza, B. K., Fihla, S., & Stofile, R. (2025). The radical and disruptive entrepreneurial innovation culture in South Africa’s townships. International Journal of Entrepreneurship, Business and Creative Economy, 5(1), 74–90. https://doi.org/10.31098/ijebce.v5i1.2785 DOI: https://doi.org/10.31098/ijebce.v5i1.2785

Goud, K. A., Kumar, K. S., & Prasad, C. S. (2019). Impact of microfinance on women entrepreneurship. Think India Journal, 22(10), 3741–3751.

Gupta, P. K., & Sharma, S. (2023). Literature review on effect of microfinance institutions on poverty in South Asian countries and their sustainability. International Journal of Emerging Markets, 18(8), 1827–1845. DOI: https://doi.org/10.1108/IJOEM-07-2020-0861

Kasali, T. A., Fashanu, F. A., & Adeniyi, F. (2021). The influence of microfinance institutions as catalyst for improved performance of small scale enterprises in Nigeria. In International Conference on New Trends in Management, Business and Economics.

Khursheed, A., Khan, A. A., & Mustafa, F. (2021). Women’s social empowerment and microfinance: A brief review of literature. Journal of International Women's Studies, 22(5), 249–265.

Koti, K., & Modiba, F. S. (2022). The role of microfinance institutions in enhancing the sustainability of women-owned SMMEs. Investment Management and Financial Innovations, 19(2), 306–319. DOI: https://doi.org/10.21511/imfi.19(2).2022.27

Maganga, A. (2021). Impact of microfinance village savings and loan associations on women’s empowerment and resilience against vulnerability in Malawi. International Journal of Rural Management, 17(2), 190–212. DOI: https://doi.org/10.1177/0973005220972551

Majola, R. (2024). Analysis of women entrepreneurship in township and rural areas in South Africa. Journal of the International Council for Small Business, 1–9. DOI: https://doi.org/10.1080/26437015.2024.2412280

Mapanga, A., & Gavaza, B. K. (2025). Towards a unified conceptual framework for understanding the entrepreneurship construct. International Journal of Business Ecosystem & Strategy, 7(3), 102–113. https://doi.org/10.36096/ijbes.v7i3.828 DOI: https://doi.org/10.36096/ijbes.v7i3.828

Mbinda, Z. (2024). Exploring the role of township economy on youth empowerment, employment and entrepreneurship.

Merheb, M. (2020). Global slums in global cities: The case of Dharavi, Mumbai (Doctoral dissertation). Politecnico di Torino.

Mishra, A., Igwe, P., Lean, J., & Megicks, P. (2014). Microfinance: Supporting micro and small enterprises. In The Routledge Companion to Financial Services Marketing (pp. 423–437). Routledge.

Mtsweni, T. N. (2018). Resilience factors as perceived by orphaned adolescents in grandparent-headed households (Master's thesis). University of Pretoria, South Africa.

Nambiar, Y., Sutherland, M., & Scheepers, C. B. (2020). The stakeholder ecosystem of women entrepreneurs in South African townships. Development Southern Africa, 37(1), 70–86. DOI: https://doi.org/10.1080/0376835X.2019.1657001

Nathoo, A. (2022). Influence of microfinance institutions on women entrepreneurs in leadership and innovation in Dar-Es-Salaam, Tanzania (Doctoral dissertation). St. Thomas University.

Nawaz, F. (2019). Microfinance and women’s empowerment in Bangladesh. Springer Nature. DOI: https://doi.org/10.1007/978-3-030-13539-3

Ngono, J. F. L. (2021). Financing women’s entrepreneurship in Sub-Saharan Africa: Bank, microfinance and mobile money. Labor History, 62(1), 59–73. DOI: https://doi.org/10.1080/0023656X.2020.1851666

Ngono, H. (2020). The role of microfinance institutions in financing female entrepreneurship in South Africa. African Journal of Business Management, 14(3), 65–78.

Nkwocha, O. U. (2019). Microfinance, women’s entrepreneurial development and empowerment in Nigeria (Doctoral dissertation). Birmingham City University.

Nukpezah, J. A., & Blankson, C. (2017). Microfinance intervention in poverty reduction: A study of women farmer-entrepreneurs in rural Ghana. Journal of African Business, 18(4), 457–475. DOI: https://doi.org/10.1080/15228916.2017.1336915

Nyathi, L. (2022). Challenges facing SMEs in the Western Cape townships with a focus on gender issues.

Oni, O. (2018). The socio-economic challenges faced by women entrepreneurs in South African townships. Management Dynamics, 113.

Owusu-Yeboah, E., Gideon, O. Y., & Uwineza, D. (2020). Microfinance and women’s empowerment in Ghana: Challenges and prospects. International Journal of Academic Research in Business and Social Sciences, 10(10), 377–404. DOI: https://doi.org/10.6007/IJARBSS/v10-i10/7945

Pakkanna, M., Rasulong, I., & Akhmad, S. I. W. (2020). Microfinance institutions and women empowerment: Evidence in the rural areas of Tangerang, Indonesia. International Journal of Scientific and Technology Research, 9(2), 3994–3999.

Parvin, G. A., Rahman, S. H., & Jia, S. (2020). Microfinance and women’s empowerment: A case study on Bangladesh’s microfinance institutions. Journal of International Development, 32(4), 589–611.

Pasha, N. (2023). A study on role of micro finance institutions in financial autonomy of women with reference to We-Care Charitable Trust, Bengaluru. SJCC Management Research Review, 118–135. DOI: https://doi.org/10.35737/sjccmrr/V13/i1/2023/186

Petersen, L. M., & Charman, A. J. E. (2018). The scope and scale of the informal food economy of South African urban residential townships: Results of a small-area micro-enterprise census. Development Southern Africa, 35(1), 1–23. DOI: https://doi.org/10.1080/0376835X.2017.1363643

Rogerson, C. M. (2000). Emerging from apartheid's shadow: South Africa's informal economy. Journal of International Affairs, 673–695.

Rwafa-Ponela, T., Goldstein, S., Kruger, P., Erzse, A., Abdool Karim, S., & Hofman, K. (2022). Urban informal food traders: A rapid qualitative study of COVID-19 lockdown measures in South Africa. Sustainability, 14(4), 2294. DOI: https://doi.org/10.3390/su14042294

Samineni, S., & Ramesh, K. (2023). Measuring the impact of microfinance on economic enhancement of women: Analysis with special reference to India. Global Business Review, 24(5), 1076–1091. DOI: https://doi.org/10.1177/0972150920923108

Sanyal, P. (2009). From credit to collective action: The role of microfinance in promoting women’s social capital and normative influence. American Sociological Review, 74(4), 529–550. DOI: https://doi.org/10.1177/000312240907400402

Stromquist, N. P. (2015). Women’s empowerment and education: Linking knowledge to transformative action. European Journal of Education, 50(3), 307–324. DOI: https://doi.org/10.1111/ejed.12137

Sundler, A. J., Lindberg, E., Nilsson, C., & Palmér, L. (2019). Qualitative thematic analysis based on descriptive phenomenology. Nursing Open, 6(3), 733–739. DOI: https://doi.org/10.1002/nop2.275

Tariq, S., & Bhat, M. A. (2020). Microfinance and women entrepreneurship: An extant literature review. Journal of Entrepreneurship and Management, 9(3), 18.

Tengeh, R. K. (2016). Entrepreneurial resilience: The case of Somali grocery shop owners in a South African township. Problems and Perspectives in Management, 14(4), 203–211. DOI: https://doi.org/10.21511/ppm.14(4-1).2016.09

Ullah, I., & Khan, M. (2017). Microfinance as a tool for developing resilience in vulnerable communities. Journal of Enterprising Communities: People and Places in the Global Economy, 11(2), 237–257. DOI: https://doi.org/10.1108/JEC-06-2015-0033

Urban, B., & Ndou, B. (2019). Informal entrepreneurship: A focus on South African township entrepreneurs. Journal of Developmental Entrepreneurship, 24(4), 1950021. DOI: https://doi.org/10.1142/S1084946719500213

Velaudham, C., & Baskar, P. (2019). Role of microfinance on performance of women entrepreneurs. Think India Journal, 22(18), 128–140.

Witbooi, M., & Ukpere, W. (2011). Indigenous female entrepreneurship: Analytical study on access to finance for women entrepreneurs in South Africa. African Journal of Business Management, 5(14), 5646–5657.

Yazdani, N., & Darvish, H. (2020). Microfinance and rural women empowerment: Evidence from Iran. Journal of Rural Development, 39(2), 153–170.

Zaman, H. (2004). The scaling-up of microfinance in Bangladesh: Determinants, impact, and lessons. World Bank Policy Research Working Paper No. 3398. DOI: https://doi.org/10.1596/1813-9450-3398

Zhou, W., & Guo, X. (2021). Does microfinance reduce poverty? Evidence from rural China. China Agricultural Economic Review, 13(2), 417–435.

Zulu, L., & Kanyamuna, V. (2017). Microfinance and smallholder farmers’ empowerment: A case of Zambia. International Journal of Social Economics, 44(12), 1541–1557.

Zwane, P., & Matsau, T. (2023). Microfinance, entrepreneurship, and social capital development in low-income communities of South Africa. African Journal of Economic and Management Studies, 14(4), 523–540.