Predicting social grant recipients' entrepreneurial willingness to be self-employed

Abstract

Social grants in South Africa were introduced to reform a previously biased social welfare system that excluded non-white citizens. With approximately 29 million grant beneficiaries and an unemployment rate of 32.9%, the sustainability of social assistance is under scrutiny, especially given South Africa’s low entrepreneurial growth rate compared to other African countries. Studies show that unemployed or low-income individuals often supplement their livelihoods with income from social grants. This study sought to create and evaluate a predictive model using structural equation modelling (SEM) to understand the factors influencing social grant recipients' willingness to be self-employed, focusing on their need for achievement, planned behaviour and their individual entrepreneurial orientation. The research was carried out in two phases - a review of literature and an empirical investigation, with data collected from 725 social grant recipients in Johannesburg, Tshwane and rural Limpopo Province through self-administered questionnaires for the empirical phase of the study. Descriptive statistics revealed a sample made up predominantly of female recipients aged from 18 to 40, with 36% having completed matric. Major challenges identified in starting a business included access to finance, business training and marketing strategies. Exploratory and confirmatory factor analyses identified constructs such as "achievement motivation" and "apathy" as significant in measuring entrepreneurial orientation. The Theory of Planned Behaviour was validated, showing that attitude, subjective norms and perceived behavioural control predict entrepreneurial intentions. Hypothesis testing indicated that perceived obstacles significantly influence achievement motivation, apathy and behavioural intentions. Despite government support programmes, access to finance remains a major hurdle. The findings highlight the need for tailored financial products, comprehensive business training and improved policy implementation to support social grant recipients in overcoming barriers to entrepreneurship. Enhancing an entrepreneurial willingness and mindset is crucial for motivating social grant recipients towards self-employment, and in this way contributing to economic development and poverty alleviation in South Africa.