BANKING ON FAMILY: WHAT WAS THE ROLE OF FAMILY IN THE ESTABLISHMENT OF BANKS IN NINETEENTH CENTURY SOUTH AFRICA?

Banks act as an intermediary 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. However, what is not known is what the impact of social connections, especially familial connections, between shareholders are on the establishment of banking connections. Using data from nineteenth 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 key to the establishment of these banks. This research opens new lines of inquiry into how these network structure may influence the success of these ventures as well