Examining Ethnic Entrepreneurs’ Funding Access in Post-Crisis Ireland

Purpose: Considering the growing number of ethnic-entrepreneurs in Ireland and the government‟s policy focus on Small-to-Medium Enterprises (SME), this paper explores ethnic-entrepreneurs access to external (bank) finance. Irish SMEs in general are heavily reliant on bank finance and following the global financial crisis (GFC) and Irish banking and property crises, they have experienced dramatic credit rationing. We explore whether the ethnic-minority SME in Ireland has experienced a similar funding gap and the extent to which their social capital inhibits their funding opportunities. Methodology: Thirty ethnic-minority entrepreneurs in the Midlands region of Ireland were surveyed and interviewed using a snowball sampling approach. Findings: The findings suggest that ethnic-minority SMEs have a significantly higher rate of credit refusal and have comparatively limited finance opportunities. Ethnic-entrepreneurs‟ social capital resources inhibited their funding preferences as suggested by the Pecking Order Hypothesis; in particular, their weak cognitive and relational resources negatively impacted their structural social capital in relation to formal bank-loan applications. Access to government entrepreneurial supports were also constrained by a dearth of social capital resources that manifested in a range of restrictions (fear of rejection, layers of bureaucracy, lack of adequate information, language barriers). Value: This paper uniquely sheds light on the ethnic-entrepreneur‟s awareness, understanding and in some cases, experiences of accessing bank finance, microfinance and other government supports in post-crisis Ireland. From this specific national experience, policy recommendations to more effectively support ethnic-minority entrepreneurs in accessing finance are identified and discussed.