Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303699 
Year of Publication: 
2022
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 10 [Issue:] 1 [Article No.:] 2095765 [Year:] 2022 [Pages:] 1-17
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
The objective of this paper was to establish challenges and benefits on formalisation in South Africa using a qualitative approach. To meet the objective, 15 interviews were carried out with owners of small businesses that had just formalized in Johannesburg and Pretoria. This study contributes to the existing knowledge on small business formalisation by bringing evidence from formalised businesses. The research does so through asking unique questions that cannot be answered quantitatively. Using themes for analysis, the study found conditional formalisation, high levels of bureaucracy, unsustainable fees, information asymmetry, credit or capital unavailability and corruption as key challenges being faced by emerging entrepreneurs. In addition, the study also identified increased chances to benefit from BEE, improved access to information to supply the public sector, improved chances of securing credit, increased credibility of the business and better access to markets as the benefits that entrepreneurs derive from formalisation. This study recommends that informal businesses be supported through skills training initiatives and expanded credit opportunities so that they can be of better size and capacity to formalise.
Subjects: 
formalisation
tax evasion
survivalists
informal
Small businesses
JEL: 
E24
J81
L26
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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