Financial bootstrapping as a sustainable livelihood alternative for agricultural co-operatives in an emerging economy

Download This Article

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

There is a scarcity of scholarly literature relating to financial bootstrapping in emerging economies, especially the use by co-operatives in general and agricultural co-operatives in particular. As such, the financial bootstrapping methods used by agricultural co-operatives in South Africa, an emerging economy, remain unknown (Rwekaza, 2021; Zantsi, 2021). The aim of this study is to determine the financial bootstrapping methods used by agricultural co-operatives. This study was undergirded by pragmatism, which allowed and guided the adoption of mixed-methods research. The qualitative aspect was given more priority or weight in answering the research questions, making it a quan → QUAL design. The study consisted of 52 agricultural co-operatives located in KwaZulu-Natal, South Africa. It was found that agricultural co-operatives practised some of the bootstrapping methods, especially those related to owner-related financing. However, there is little or no evidence of bootstrapping practices related to sharing resources and minimising capital invested in stock and accounts receivable. The co-operatives stifled their growth as they employed counter-bootstrapping activities caused mainly by their unsubstantiated beliefs. This research furnishes rural co-operatives with operational capital-enhancing guidelines that promote success.

Keywords: Agricultural Co-Operatives, Counter-Bootstrapping Activities, Developing Economy, Financial Bootstrapping, Growth, Sustainability

Authors’ individual contribution: Conceptualization — B.K.Z.; Methodology — B.K.Z., M.S., and E.M.; Investigation — B.K.Z.; Writing — Original Draft — B.K.Z.; Writing — Review & Editing — C.J.N., M.S., E.M., and N.F.; Formal Analysis — B.K.Z., C.J.N., and E.M.; Supervision — C.J.N., M.S., E.M., and N.F.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M40, M41, Q10, Q14

Received: 13.05.2024
Accepted: 16.09.2024
Published online: 18.09.2024

How to cite this paper: Zwane, B. K., Nyide, C. J., Sikwela, M., Mantzaris, E., & Fuyane, N. (2024). Financial bootstrapping as a sustainable livelihood alternative for agricultural co-operatives in an emerging economy. Corporate Governance and Sustainability Review, 8(2), 37–47. https://doi.org/10.22495/cgsrv8i2p3