Entrepreneurial intentions and perceived access to finance: the role of entrepreneurial self-efficacy
Nengomasha, Melatia Chipo
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Entrepreneurship has been widely recognised as the backbone of every economy, because it is the primary driver of job creation, wealth, innovation, economic growth and development (Neneh & Van Zyl, 2014; Afolabi, 2015; Aberman, 2016). In South Africa, the current high rate of youth unemployment has become a cause for concern because there are few employment opportunities to accommodate the increase in the number of students graduating from South African tertiary institutions (South African Higher education Open Data, 2013). As such, this study was aimed at examining the role of entrepreneurial self-efficacy (ESE) on the relationship between perceived access to finance (PAF) and entrepreneurial intention (EI). The data was collected using questionnaires that were distributed to 620 students randomly selected from all the departments in the Economic and Management Sciences faculty at the University of the Free State. The researcher issued 620 questionnaires and only 555 were collected, 500 out of the 555 questionnaires were used for the research because the respondents had completed them in full. This resulted in an 80.65% response rate. The Statistical Package for Social Sciences (SPSS) was used for data analysis and the results were interpreted using descriptive and inferential statistics. Furthermore, the Hierarchical regression model was used to test the hypothesis. The findings of the research revealed that youths have a moderate level of entrepreneurial intention. Also, youths have moderate levels of ESE and PAF. The results further revealed that ESE and PAF both have a significant relationship with EI. Furthermore, the results confirmed that ESE has a significant positive moderating effect on the EI-PAF relationship. These findings gave some insight to researchers, policy makers and educational institutions to focus on improving the entrepreneurial self-efficacy of youths as it could significantly enhance the students’ entrepreneurial intentions. Based on the findings, the study provided a number of recommendations for fostering entrepreneurial intentions of youths. Firstly, it is recommended that youths should be given an opportunity to be exposed to the work environment, through internships and on the job training in order to equip them with valuable business skills, knowledge and technical experience relevant for starting a business. Secondly, tertiary institutions should ensure that their entrepreneurship education curriculum focuses on developing an individuals’ self-confidence and entrepreneurial self-efficacy. Furthermore, it is recommended that policy makers should introduce finance exhibitions were students are educated about how to; draft business plans and how to write funding proposals in order to encourage them to be independent and self-reliant when seeking financial assistance from financial institutions. Finally, it was suggested that government should collaborate with financial institutions and successful entrepreneurs to ensure that students with viable business plans are provided with adequate start-up capital and mentors to guide them as they start their entrepreneurial career path. In order to promote entrepreneurship growth, policy makers, government and educational institutions are urged to encourage and motivate youths in South Africa to participate in various entrepreneurship activities, as this will help improve their entrepreneurial intentions.