Examining the impact of family and governmental support on the intention to formalise of women entrepreneurs in Sub-Saharan Africa

Abstract

This paper argues that supporting informal women entrepreneurs (IWEs) in their intention to formalise may advance the agenda of improved economic inclusion, economic growth, and development. This, therefore, contributes to reversing the apparent sub-Saharan African (SSA) failure to achieve the Sustainable Development Goals. As policymakers and families are essential stakeholders of IWEs, the paper examines the impact of their support in fostering the transition of IWEs into registered business ventures. To achieve its aim, the paper employs structural equation modelling (SEM) to analyse survey data collected in Cameroon during a period of crisis. The SEM results show that family support significantly and positively predicts IWEs’ intention to formalise (β = 0.39, p < 0.01), while governmental support is positively associated with this intention (β = 0.76, n.s.). The model displays a good fit (SRMR = 0.055; RMSEA = 0.077; CFI = 0.963; TLI = 0.950). These findings suggest that (1) family support positively influences all dimensions of IWEs’ formalisation intention, (2) governmental support tends to discourage formalisation, and (3) specific types of governmental programmes may still foster a positive impact depending on their quality and design. Following finding (1), as direct financing received from IWEs’ families appears to best support IWEs’ transition, the paper proposes an “on behalf of ” support plan wherein governmental policy or programmes provide financial guarantees or subsidies to IWEs’ families that can demonstrate successful support in the transformation of IWEs to formal businesses. By highlighting the critical role of family support, the paper advances research on women’s entrepreneurship and provides actionable insights for policymakers.