Original Research

Debt financing the capital requirements of informal market traders

Derek Schraader, Louise Whittaker, Ian McKay
South African Journal of Economic and Management Sciences | Vol 13, No 3 | a105 | DOI: https://doi.org/10.4102/sajems.v13i3.105 | © 2010 Derek Schraader, Louise Whittaker, Ian McKay | This work is licensed under CC Attribution 4.0
Submitted: 03 September 2010 | Published: 10 September 2010

About the author(s)

Derek Schraader, university of the Witwatersrand, South Africa
Louise Whittaker, University of the Witwatersrand
Ian McKay, University of the Witwatersrand, South Africa

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This paper describes a case study undertaken to determine whether formal sector personal debt financing might contribute to the funding of South African informal market traders. The case study was conducted at the Natalspruit informal market in Ekhuruleni, Gauteng1.  Quantitative questionnaire surveys and a financial diaries project established that market traders in the Natalspruit informal market: have capital requirements large enough to justify the use of formal sector debt financing, can generate sufficient operating profits to pay for formal sector debt financing, and would be willing to utilise formal sector debt financing if given the opportunity. However, formal sector debt financing is most relevant to those informal market traders with the skills and motivation to utilize financing provided effectively and who are willing to inject more formality into their business.


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