Barriers to Accessing Government Financial Support for Entrepreneurs in Mthatha

Abstract

Despite the critical role of entrepreneurs in economic development, access to government financial support remains a significant challenge in under-resourced regions. This study examines the barriers entrepreneurs in Mthatha, Eastern Cape, face when seeking public funding. Framed by Institutional Theory, the research conceptualises these hurdles as a misalignment between entrepreneurs' informal practices and the formal, rigid institutional demands of support systems. Through a purposive sample size of 15 established micro-entrepreneurs and semi-structured interviews, the study identified five interconnected systemic barriers: a daunting, opaque information landscape; prohibitive administrative and financial costs; perceptions of unfairness and non transparent processes; a critical reliance on personal networks; and a significant emotional toll, leading to frustration and resignation. The findings reveal that a cycle of exclusion in which information asymmetry forces reliance on social capital, while financial burdens and procedural opacity compound the system's inaccessibility. This study contributes to the literature by providing a granular analysis of these barriers, highlighting how coercive, mimetic, and normative isomorphism manifests in the local funding ecosystem. The implications call for a fundamental redesign of support schemes, moving from a compliance-centric to a user-centric model to emerging entrepreneurs. The study recommends a proactive multi-channel communication, simplification and decentralisation of application processes, enhanced transparency, capacity building for officials, and a review of restrictive eligibility criteria. This research provides policymakers with evidence-based insights to transform financial support into a practical tool for inclusive local economic development.