An examination of barriers in transitioning from informal to formal business sector in Windhoek (Namibia)
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Date
2022
Authors
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Journal ISSN
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Publisher
University of Namibia
Abstract
The study examined the barriers in transitioning from the informal to the formal business sectors
in Windhoek (Namibia). The statistics in Namibia indicate that there are several informal
businesses in Namibia that have the potential to boost the economy. However, the transition of
these informal businesses to formal businesses is not satisfactory. Thus, the study was carried out
to examine barriers contributing to this slow formalization of informal businesses. The study was
premised in the pragmatic research paradigm and followed the mixed methods approach. The
mixed methods approach was used to draw upon beliefs, views and experiences of informal
entrepreneurs on the barriers in transitioning from the informal to the formal business sectors in
Windhoek. A sample of 40 businesses was drawn from five business categories. Convenience
sampling technique was employed to select 40 participants who were administered with the
questionnaires, which contained both close-ended and open-ended questions. Quantitative data
collected from the section of the questionnaire which had close ended questions was analyzed
through descriptive analysis and the frequency graphs, charts and tables were used to present the
data. Qualitative data collected through the section of the questionnaire which had open ended
questions was analysed thematically. The findings of the study indicated that advancements in
technology challenges and lack of capital funding from banks and the government are the major
barriers for the transitioning of the informal businesses to formal businesses. The study concluded
that for business to be formalized, they need information, government support and sufficient
technological advancement to assist them in transitioning. The study recommends that the
government needs to consider the informal sector as fundamental part of its economy and come
up with some solutions to integrate it into the main national economic programs, to facilitate the
transition to formal sector, which will result in a high contribution to the country's GDP
Description
A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Business Administration Finance
Keywords
Barriers in transitioning, Informal to the formal business sectors, Economy, Namibia, University of Namibia