Business and Economic Horizons

  Previous Article | Back to Volume | Next Article
  Abstract | References | Citation | Download | Preview | Statistics
Volume 13
Issue 3
Online publication date 2017-09-11
Title SMME attitudes towards financial bootstrapping: A perspective from a developing economy
Author Bonginkosi Keith Zwane, Celani John Nyide
The national and international literature and research on SMMEs has been developed very strongly in the last decade. There have been many successful attempts on the part of many researchers and scholars to unpack new and innovative dimensions of SMMEs’ operations, behaviour, attitudes, functions and other dynamics that boost, sustain or impede their growth and development. There is, however, a gap in research, regarding a very distinct practice within SMMEs in developing economies, that of bootstrapping. This study, therefore, used a sample chosen on a non-probability basis using convenience sampling of small business owners within the eThekwini Municipality, KwaZulu-Natal, South Africa. 83 participants completed the questionnaire. The study found that the practice of financial bootstrapping was very high amongst the investigated SMMEs. The use of financial bootstrapping within SMMEs is coincidental. The majority of the respondents indicated that they did not undergo any formal training on the use of financial bootstrapping methods.
Afolabi, Y.A., Odebunmi, A.T., & Ayo-Oyebiyi, J.T. (2014). Bootstrap financing techniques among small enterprises in Osogbo metropolis. Global Business and Economics Research Journal, 3(1), 24-54.
Amra, R., Hlatshwayo, A., & McMillan, L. (2013). SMME employment in South Africa. Biennial Conference of Economics Society of South Africa. (pp. 25-27). Bloemfontein, September 2013
Bhide, A (1992). Bootstrap finance: The art of start-ups. Harvard Business Review, 70(6), 109-117.
Bonett, D.G., & Wright, T.A. (2015). Cronbach's alpha reliability: Interval estimation, hypothesis testing, and sample size planning. Journal of Organizational Behavior, 36, 3-15.
Bruwer, J.P., & Van Den Berg, A. (2017). The conduciveness of the South African economic environment and small, medium and micro enterprise sustainability: A literature review. Expert Journal of Business and Management, 5(1), 1-12.
Cant, M.C. (2016). The perceived value of advice given to SMMEs at events: catalyst for action or despondency? Problems and Perspectives in Management, 14(4), 247-255.
Cant, M.C., Erdis, C., & Sephapo, C.M. (2014). Business Survival: The constraints experienced by South African SMEs in the financial sector. International Journal of Academic Research in Business and Social Sciences. 4(10), 565-579.
Cant, M.C., & Wiid, J.A. (2013). Establishing the challenges affecting South African SMEs. International Business & Economics Research Journal. 12(6), 707-716.
Daniel, E. M., Di Domenico, M. L., & Sharma, S. (2015). Effectuation and homebased online business entrepreneurs. International Small Business Journal. 33(8), 799-823.
Drees, J.M., & Heugens, P.P.M.A.R. (2013). Synthesizing and extending resource dependence theory: A meta-analysis. Journal of Management, 39(6), 1666-1698.
Fatoki, O. (2014). The financial bootstrapping methods employed by new micro enterprises in the retail sector in South Africa. Mediterranean Journal of Social Sciences. 5(3), 72-80.
Grichnik, D., Brinckmann, J., Singh, L., & Manigart, S. (2013). Beyond environmental scarcity: Human and social capital as driving forces of bootstrapping activities. Journal of Business Venturing, 29, 310-326.
Jonsson, S., & Lindbergh, J. (2013). The development of social capital and financing of entrepreneurial firms: From financial bootstrapping to bank funding. Entrepreneurial Theory and Practice, 37(4), 661-686.
Kruger, J., Chantal, T., & Saunders, S. (2015). Macro-economic factors influence on South African SMME business performance. 9th International Academic Conference (pp. 461-481). Florence, Italy, September 16, 2015, IISES.
Lekhanya, L.M. (2015). Public outlook on small and medium enterprises as a strategic tool for economic growth and job creation in South Africa. Journal of Governance and Regulation, 4(4), 412-418.
Löfqvist, L. (2017). Product innovation in small companies: Managing resource scarcity through financial bootstrapping. International Journal of Innovation Management, 21(2), 1-27.
Munyanyi, W. (2015. Winborg and Landstrom's financial bootstrapping strategies and Zimbabwean rural entrepreneurs. International Journal of Academic Research in Business and Social Sciences, 5(7), 289-299.
Okpara, J.O. (2011). Factors constraining the growth and survival of SMEs in Nigeria implications for poverty alleviation, Management Research Review, 34(2), 156-171.
Phillips, M., Moos, M., & Nieman, G. (2014). The impact of government support initiatives on the growth of female businesses in Tshwane South Africa. Mediterranean Journal of Social Sciences, 5(15), 85-92.
Schofield, R. M. (2015). Relationship between bootstrap financing, Number of employees, and small business success. DBA. Thesis, Walden University.
Timm, S. (2011). How South Africa can boost support to small businesses - Lessons from Brazil and India. Trade & Industrial Policy Strategies (TIPS). Retrieved June 3, 2016 from
Tomory, E.M. (2010). Nurturing innovation through bootstrap financing - An entrepreneurial perspective. [online]. Retrieved June 1, 2016 from
Van Auken, H. (2004). The Use of Bootstrap Financing Among Small Technology-Based Firms, Journal of Developmental Entrepreneurship, 9(2), 145-159.
Vanacker, T., & Sels, L. (2009). Bootstrapping strategies and entrepreneurial growth: A longitudinal study (Summary). Frontiers of Entrepreneurship Research, 29(1), Article 6.
Winborg, J. (2015). The role of financial bootstrapping in handling the liability of newness in incubator businesses. Entrepreneurship and Innovation, 16(3): 197-206.
Worku, Z. (2016). Barriers to the growth of small, micro and medium-sized business enterprises in the Vaal Triangle region of South Africa. African Journal of Science, Technology, Innovation and Development, 8(2), 134-141.
Zwane, B.K., & Nyide, C.J. (2016). Financial bootstrapping and the small business sector in a developing economy. Corporate Ownership and Control, 14(1), 433-442.
Keywords Developing economy, financial bootstrapping, SMMEs
Pages 347-356
Download Full PDF Download
  Previous Article | Back to Volume | Next Article
Search in articles
Journal Published articles
BEH 601
Journal Hits
BEH 1357806
Journal Downloads
BEH 45681
Total users online -