The role of social networks in supporting micro and small entrepreneurship in Malawi

University essay from SLU/Dept. of Urban and Rural Development

Abstract: In rural Malawi, the youth do not have access to credit and adequate entrepreneurship training. Despite alienation from Microfinance institutions, there are many Micro and Small Enterprises operating in the rural informal sector. This study was undertaken to understand how these entrepreneurs acquire the resources to engage in micro and small enterprises. To investigate the role that social networks play in providing the necessary inspiration, skills and resources for rural young people to participate in entrepreneurship. Using semi-structured interviews, group discussions, focus group discussions, and key informant interviews to collect field data in Mpemba, Blantyre District, Southern Region of Malawi. Social networks are responsible for socialising young people to desire entrepreneurship by transferring the necessary skills, social capital and resources. Bank Nkhonde and church membership; are the social groups that develop social networks which are important in mentoring the youth for investments. The cultural context has enabled social networks to be relevant as the transactions involved in the networks are backed by cultural obligations and expectations. Women were found to be limited in the enterprises they pursue due to cultural expectations and sharing of responsibilities while men were likely to migrate. Social networks act as a safety net in times of illnesses, funerals and dire need for communities.

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