Banking on Family: What Was the Role of Family in the Establishment of Banks in 19th-Century South Africa?

Abstract

Banks act as intermediaries between those with funds and those who seek funds for economic enterprises. They are a source of credit and capital investment, and their economic value is clear. Less is known about the role of social connections in the establishment of banks. Using data from 19th-century South Africa, we study the establishment of colonial banks and their shareholder profile. We show, using network analysis, that family connections and influential individuals were crucial to the establishment of these banks. This research opens new lines of inquiry into how these network structures may have influenced the success of these ventures as well.