Immigrant entrepreneurs’ inclusion in Canadian formal financing context using social capital theory

Abstract In recent decades, the vital role of immigrants in promoting economic growth and innovation, especially in Western economies like Canada, has become increasingly evident. Aligned with the United Nations Sustainable Development Goal 8, which emphasizes inclusive and sustainable economic growth and productive employment, immigrant entrepreneurship holds significant potential. However, many immigrant entrepreneurs continue to face systemic barriers in accessing formal financial resources in host countries. This research investigates the mechanisms immigrant entrepreneurs in Canada use to navigate these challenges and secure formal financing, offering insights into how inclusive financing systems can better support decent work and economic opportunity for all. Guided by social capital theory, this research adopts a qualitative approach using semi-structured interviews with twelve successful immigrant entrepreneurs. Thematic analysis was employed to identify themes across cases, and theoretical sampling ensured depth and saturation in data collection. The findings reveal that social capital (manifested through trust, information flow, and financial literacy (human capital)) plays a central role in enabling access to formal financing. These elements are dynamically interrelated and reinforced through weak-tie networks, digital platforms, and institutional intermediaries such as incubators. Key mechanisms include peer-to-peer learning, community engagement, self-directed knowledge acquisition, and trust-building through documentation and referrals. The study aims to contribute to the existing body of knowledge on immigrant entrepreneurship formal financing by proposing a hybrid social capital model suited to digitally networked, institutionally layered environments. By focusing on Canadian immigrant entrepreneurs, who have received limited attention in previous research compared to their counterparts in the US and UK, the study fills a critical gap in understanding the formal financing journeys of immigrant entrepreneurs.