IMMIGRANT ENTREPRENEURS

John Cranfield, Chief Executive, First Step Microfinance

Is Ireland an attractive place for immigrants to set up their own businesses? Immigrants have many reasons for seeking their fortunes here, writes John Cranfield.

An ethnic enterprise mini boom is visible on the streets of major cities in Ireland and cultural pluralism has become the Irish reality. However cultural diversity does not necessarily lead to a multicultural market place for those seeking their fortunes in the SME sector. The influx of foreign nationals has been rapid, with many of these immigrants coming from different enterprise cultures. In the recent past, more than 45,000 persons have been migrating to Ireland every year, whereas fewer than 20,000 have been emigrating. The very fact that they may have chosen to leave their countries for a better life may be an indication in itself that many of these may be entrepreneurial in persuasion.

Why come to Ireland?

Immigrant workers come to Ireland for economic reasons, to improve their life chances, and sometimes to escape extreme poverty or conflict. In Ireland, migrant workers from Eastern Europe and Asia can earn a multiple of what they can earn in their home countries. The general strength of the Irish economy in recent years has provided many opportunities for new enterprises. Demographic factors such as increased population, increased inward migration, and the relative youth of the population have all played a part in providing a context in which entrepreneurial activity has thrived.

So who can be self-employed and who are Ireland’s ethnic entrepreneurs? Despite the fact that forms issued by the Companies Registration Office for business formation all include a question on nationality there are no official figures to say how many ethnic businesses are setting up in Ireland.

Business Permission

In April 2005 the Department of Justice Equality and Law Reform published a consultation document on the development of an immigration and residence framework in Ireland. The document deals with selfemployment and permission applications that have been received in recent years.

The document outlines the main areas of business permission applications coming from ethnic restaurants, chiropractors, translators and information technology. When granted, permission is initially for a period of twelve months with the possibility of A longer period being granted upon renewal. However, the discussion document notes that there is anecdotal evidence that some immigrants are operating businesses in Ireland without obtaining the Minister’s permission.

The document says it’s hardly surprising given the stringent requirements, length of time to process the application, and number of permissions granted. There is a need for co-ordination between public services bodies dealing with the issue of company formation to ensure that the requirements of business permission are being complied with by those seeking to establish companies in Ireland.

Financial Support

To date, there is no specific micro finance initiative available to or directed specifically towards ethnic minority business. Bank of Ireland has been the first to formally recognise the business potential from immigrant business, and in 2005 they launched the first ever banking programme of initiatives. It represents an acknowledgement of the growing importance and potential of immigration to the Irish economy. However, there is little support from the main financial institutions for the typical ethnic business that cannot provide guarantees or security for loans. Such business start-ups, both native and ethnic, typically obtain finance from organisations such as First Step which is a not for profit organization established to provide micro loan finance to businesses that cannot access funding from other sources.

What needs improvement?

Entrepreneurs and experts consulted in Ireland as part of GEM research frequently cited issues surrounding access and availability of finance as weaknesses in the Irish entrepreneurial environment. Issues around government policy, in particular the burden of compliance costs and local authority charges on new companies were also mentioned as weaknesses.

Author: John Cranfield is Chief Executive, First Step Microfinance. For more information email info@first-step.ie or call +353 (01) 2600988