Indigenous African Financing Strategies as a Unique Engine for Entrepreneurship Growth

Abstract

The efficacy of conventional financing strategies such as angel investment and venture capital financing developed in the context of Western economies but applied to Africa remains a subject of interest. This chapter, therefore, examined financing strategies that are indigenously peculiar to Africa and opportunities therein that could lead to entrepreneurial growth. Consequently, based on a number of criteria such as population and gross domestic product, five countries were selected from the five distinct African geographical regions while six different homogenous ethnic groups were selected from the five countries based on numbers (strength) and spread. A study of the financing strategies of these ethnic groups revealed germane customary funding practices based on culture and communal norms. Thus, as a result of the findings, a model was developed to explain the path to rapid entrepreneurship growth. It is emphasised that there are indigenous modes of financing strategies which the world could learn and adopt from Africa, particularly in instances where conventional theories or modes are not quite effective. Africa needs to achieve industrialisation and grow at a very rapid pace, and this could be achieved through indigenous financing strategies for its many unemployed youths. Advice for managers, educators and government officials are discussed.

Citation

Olarewaju, A.D., Adebisi, S.A. and George, O.J. (2018), "Indigenous African Financing Strategies as a Unique Engine for Entrepreneurship Growth", Indigenous Management Practices in Africa (Advanced Series in Management, Vol. 20), Emerald Publishing Limited, Leeds, pp. 147-166. https://doi.org/10.1108/S1877-636120180000020008