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IDENTIFICATION OF CHALLENGES FACED BY

ENTREPRENEURS IN MADAGASCAR: CASE STUDY OF


CASH POINT ENTREPRENEURS IN TOLIARA CITY

THESIS

Submitted to the Master of Business Administration Study


Program, Faculty of Social and Political Sciences, Diponegoro
University to fulfill the requirements for Master in Business
Administration

RALAIVAO HANGINIAINA EMYNORANE


NIM: 14030121419018

MASTER OF BUSINESS ADMINISTRATION


FACULTY OF SOCIAL AND POLITICAL SCIENCES
UNIVERSITAS DIPONEGORO
SEMARANG
2023
i
ABSTRACT

Emynorane, Ralaivao Hanginiaina. 2023. Identification of Challenges faced by


Entrepreneurs in Madagascar: Case study of cash point entrepreneurs in Toliara
city. Thesis, Business Administration Master Study Program, Faculty of Social and
Political Sciences, Universitas Diponegoro Semarang. Supervisor: (I) Dr.
Widiartanto, S.Sos, MAB, (II) Dr. Sari Listyorini, S.Sos, MAB.

Keywords: challenges, mobile money, cash point, entrepreneurs, SWOT

Cash point entrepreneurs are those who act in facilitating payment via
mobile money service within the unbanked population. They are partner with the
mobile phone operators, acting as an agent distributor to facilitate community’s
lives by providing deposit, withdrawal and transfer of money through their kiosk
that exist everywhere in the country.
The focus of this study includes: (1) the importance of cash point
entrepreneurs in developing economy; (2) the challenges faced by cash point
entrepreneurs in Madagascar; and (3) the strategy to handle these challenges faced
by cash point entrepreneurs in Madagascar. The aim of this study is to identify the
challenges faced by cash point entrepreneurs in Toliara city of Madagascar.
This study uses a qualitative approach with a case study design, in which
researcher tries to identify the challenges faced by cash point entrepreneurs in
Madagascar. Data collection techniques include: (1) in-depth interviews, and (2)
documentation studies. Data collected through these techniques are organized,
interpreted, and analyzed in depth through analysis in case in order to develop
concepts and abstraction of research findings. Data credibility is checked by
triangulation and member checking. Whereas dependability and confirmation are
carried out with the supervisors as the dependent auditor.
The findings of this study can be described as follows. First, the importance
of cash point entrepreneurs in developing economy: (1) working as a traditional
bank agent; (2) improving access to financial services; (3) facilitate the deposit,
withdraw and transfer of money; (4) supporting bill payments and marketplace
purchases; and (5) financial resilience. Second, the challenges faced by cash point
entrepreneurs in Madagascar: (1) internal factors such as financial limitation and
wrong cash point store location; (2) external factors such as network error, lack of
operator support, small commissions and rewards, and insecurity issue. Third,
SWOT matrix analysis were conducted to analyze the internal strengths, internal
weaknesses, external opportunities, and external threats of cash point entrepreneurs
in Madagascar.

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TABLE OF CONTENTS

COVER PAGE ......................................................................................................... i


STATEMENT OF AUTHENTICITY .................................................................... ii
APPROVAL........................................................................................................... iii
TABLE OF CONTENTS ....................................................................................... iv
LIST OF TABLES ............................................................................................... ivii
LIST OF FIGURES ............................................................................................ iviii
ABSTRACT ........................................................................................................... ix
CHAPTER I INTRODUCTION ............................................................................. 1
1.1 Background of the Study................................................................................... 1
1.2 Research Authenticity ....................................................................................... 9
1.3 Research Problems .......................................................................................... 10
1.4 Research Objectives ........................................................................................ 10
1.5 Significance of the Research ........................................................................... 10
1.6 Literature Review ............................................................................................ 11
1.6.1 Overview of entrepreneurship ................................................................ 11
1.6.2 Socio-economic impact of entrepreneurial business .............................. 13
1.6.3 Entrepreneurship in the developing world ............................................. 15
1.6.4 The concept of mobile money service ................................................... 18
1.6.5 Entrepreneurship development process.................................................. 20
1.6.6 Previous research ................................................................................... 22
1.7 Research Framework ....................................................................................... 24
1.8 Conceptual and Operational Definition .......................................................... 24
1.9 Research Methods ........................................................................................... 25
1.9.1 Research type ......................................................................................... 25
1.9.2 Research phenomena.............................................................................. 26
1.9.3 Types and sources of data ...................................................................... 27
1.9.4 Data collection technique ....................................................................... 27
1.9.5 Data analysis technique .......................................................................... 28
1.9.6 Data credibility ....................................................................................... 29
1.9.7 Thesis systematics .................................................................................. 30
iv
CHAPTER II OVERVIEW OF THE SETTING RESEARCH ............................ 32
2.1 Cash Point in Madagascar ............................................................................... 32
2.1.1 General overview of mobile money in Madagascar .............................. 32
2.1.2 Genaral status of cash point entrepreneurship in Madagascar ............... 32
2.1.3 Process of becoming a cash point entrepreneurs in Madagascar ........... 34
2.1 Mobile Money in Madagascar ........................................................................ 34
2.2.1 Mvola ..................................................................................................... 34
2.2.1.1 History of Mvola ........................................................................ 34
2.2.1.2 Overview of the Mvola service .................................................. 35
2.2.2 Orange Money ........................................................................................ 36
2.2.2.1 History of Orange money ........................................................... 36
2.2.2.2 Overview of the Orange money service ..................................... 37
2.2.3 Airtel Money .......................................................................................... 37
2.2.3.1. History of Airtel money ............................................................ 37
2.2.3.2 Overview of the Airtel money service ....................................... 38
2.3 Profile of Toliara City ..................................................................................... 39
2.4 Data Sources.................................................................................................... 40
2.5 Documentation about cash point entrepreneurship in Toliara city ................. 40
CHAPTER III RESEARCH RESULT ................................................................. 44
3.1 The importance of cash point entrepreneurs in Madagascar ........................... 44
3.2 Identification of challenges faced by cash point entrepreneurs ...................... 47
3.2.1 Internal factors ....................................................................................... 47
3.2.2 External factors ...................................................................................... 49
3.3 Strategy to handle the challenges faced by cash point entrepreneurs ............. 52
3.3.1 SWOT Analsysis applied in Madagascar’s cash point entrepreneurship52
3.3.1.1 Internal strengths ........................................................................ 52
3.3.1.2 Internal weaknesses .................................................................... 53
3.3.1.3 External opportunities ................................................................ 54
3.3.1.4 External threats .......................................................................... 55
3.3.2 SWOT Matrix Analysis ......................................................................... 55
CHAPTER IV DISCUSSION OF RESEARCH RESULTS ................................ 57
4.1 The importance of cash point entrepreneurs in developing economy............. 57
4.2 Identification of challenges faced by cash point entrepreneurs ...................... 62
4.3 Strategy to handle the challenges faced by cash point entrepreneurs ............. 64
v
CHAPTER V CONCLUSION .............................................................................. 69
5.1 Conclusions ..................................................................................................... 69
5.2 Suggestions ..................................................................................................... 71
BIBLIOGRAPHY ................................................................................................. 72
Appendix 1: Interview Guide No 1 ....................................................................... 79
Appendix 2: Interview Guide No 2 ....................................................................... 80
Appendix 3: Interview Guide No 3 ....................................................................... 81
Appendix 4: Interview Guide No 4 ....................................................................... 82
Appendix 5: Photo Documentation ....................................................................... 83
Appendix 6: Tarif Mvola ...................................................................................... 85
Appendix 7: Tarif Orange Money ......................................................................... 88
Appendix 8: Tarif Airtel Money ........................................................................... 90
Appendix 9: Turnitin Originality Report .............................................................. 92

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LIST OF TABLES

Table 1.1 Total of cash point entrepreneurs in Toliara city last five years ............. 7

Table 2.1 Data Sources from the research case..................................................... 40

Table 3.1 Finding about the importance of cash point entrepreneurs ................... 47

Table 3.2 Finding about internal factors-based challenges ................................... 49

Table 3.3 Finding about external factors-based challenges……………………... 52

Table 3.4 Finding about internal strengths of cash point entrepreneurship .......... 53

Table 3.5 Finding about internal weaknesses of cash point entrepreneurship ...... 54

Table 3.6 Finding about external opportunities of cash point entrepreneurship ... 54

Table 3.7 Finding about external threats of cash point entrepreneurship ............. 55

Table 3.8 SWOT matrix analysis .......................................................................... 56

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LIST OF FIGURES

Figure 1.7.1 Diagram chart of challenges faced by entrepreneurs ....................... 21

Figure 2.1 Examples of Cash point store location ................................................ 40

Figure 2.2 Telma operator office in Toliara city .................................................. 41

Figure 2.3 Orange operator office in Toliara city ................................................ 42

Figure 2.4 Airtel operator office in Toliara city ................................................... 43

Figure 3.1 Examples of closed cash point store ................................................... 51

Figure 4.1 Mobile money process ........................................................................ 59

Figure 4.2 Mobile money deposit process ........................................................... 60

Figure 4.3 Mobile money cash out process .......................................................... 61

Figure 4.4 Strategy of cash point entrepreneurship development ........................ 68

viii
ABSTRACT

Emynorane, Ralaivao Hanginiaina. 2023. Identification of Challenges faced by


Entrepreneurs in Madagascar: Case study of cash point entrepreneurs in Toliara
city. Thesis, Business Administration Master Study Program, Faculty of Social and
Political Sciences, Universitas Diponegoro Semarang. Supervisor: (I) Dr.
Widiartanto, S.Sos, MAB, (II) Dr. Sari Listyorini, S.Sos, MAB.

Keywords: challenges, mobile money, cash point, entrepreneurs, SWOT

Cash point entrepreneurs are those who act in facilitating payment via
mobile money service within the unbanked population. They are partner with the
mobile phone operators, acting as an agent distributor to facilitate community’s
lives by providing deposit, withdrawal and transfer of money through their kiosk
that exist everywhere in the country.
The focus of this study includes: (1) the importance of cash point
entrepreneurs in developing economy; (2) the challenges faced by cash point
entrepreneurs in Madagascar; and (3) the strategy to handle these challenges faced
by cash point entrepreneurs in Madagascar. The aim of this study is to identify the
challenges faced by cash point entrepreneurs in Toliara city of Madagascar.
This study uses a qualitative approach with a case study design, in which
researcher tries to identify the challenges faced by cash point entrepreneurs in
Madagascar. Data collection techniques include: (1) in-depth interviews, and (2)
documentation studies. Data collected through these techniques are organized,
interpreted, and analyzed in depth through analysis in case in order to develop
concepts and abstraction of research findings. Data credibility is checked by
triangulation and member checking. Whereas dependability and confirmation are
carried out with the supervisors as the dependent auditor.
The findings of this study can be described as follows. First, the importance
of cash point entrepreneurs in developing economy: (1) working as a traditional
bank agent; (2) improving access to financial services; (3) facilitate the deposit,
withdraw and transfer of money; (4) supporting bill payments and marketplace
purchases; and (5) financial resilience. Second, the challenges faced by cash point
entrepreneurs in Madagascar: (1) internal factors such as financial limitation and
wrong cash point store location; (2) external factors such as network error, lack of
operator support, small commissions and rewards, and insecurity issue. Third,
SWOT matrix analysis were conducted to analyze the internal strengths, internal
weaknesses, external opportunities, and external threats of cash point entrepreneurs
in Madagascar.

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