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Perceived Barriers to Entry into Self-employment in Khayelitsha, South Africa: Crime, Risk, and Start-up Capital Dominate Profit Concerns

Year: 2011
Working paper number: 300
Author: Cichello, Paul L.
Unit: ASRU
Abstract:
In South Africa, the broad unemployment rate for Africans has remained near or above forty percent for most of the last ten years. One critical reason is the relatively low level of employment in small-scale entrepreneurial work. This paper explores the factors that constrain individuals from engaging in self-employment activities in a large township in Cape Town. Crime is perceived to be the dominant hindrance to entering the micro-enterprise sector. A number of other hindrances, including capital constraints, transportation costs, and community jealousy, are on par or surpass concerns over profitability or government regulation. These findings are robust to a series of alternative ranking scheme.
Publication file: WP300.pdf
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