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The Effects of Microcredit on Profitability and the Challenges on Women Owned SMEs: Evidence from Northern Ghana

Author

Listed:
  • Eva Atu Alhassan
  • Mabel Akosua Hoedoafia
  • Imoro Braimah

Abstract

Women owned enterprises have limited access to capital as traditional banks shy away from them due to the high risk associated with lending to SMEs. Hence, several Microfinance Institutions (MFIs) sprung up with the aim of providing credit to SMEs especially women entrepreneurs. In this paper, the effect of microcredit from these MFIs on profitability of women owned SMEs is examined with data from 199 women entrepreneurs in the Tamale Metropolis of Ghana. The enterprises were randomly selected from five Microfinance Institutions and categorized based on their economic activities using stratified sampling. Semi structured interview checklist was used to survey the women owned SMEs whilst questionnaires were administered to the Microfinance Institutions. A paired sample t-test was employed to determine the changes in Gross Profit over time after which effect of size was also determined. The results indicate a significant increase in the average monthly gross profit over time.Â

Suggested Citation

  • Eva Atu Alhassan & Mabel Akosua Hoedoafia & Imoro Braimah, 2016. "The Effects of Microcredit on Profitability and the Challenges on Women Owned SMEs: Evidence from Northern Ghana," Journal of Entrepreneurship and Business Innovation, Macrothink Institute, Journal of Entrepreneurship and Business Innovation, vol. 3(1), pages 2947-2947, December.
    • Handle: RePEc:mth:jebi88:v:3:y:2016:i:1:p:2947
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    References listed on IDEAS

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    1. Sharma, Manohar & Zeller, Manfred, 1998. "Rural finance and poverty alleviation," Food policy reports 8, International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Rose Fiamohe & Sènakpon Fidèle Ange Dedehouanou & Abdelkrim Araar, 2024. "What microfinance schemes for women-owned microenterprises’ productivity in rural Benin?," Small Business Economics, Springer, vol. 62(3), pages 1075-1097, March.
    2. Obi Berko Obeng Damoah & Augustine Awuah Peprah, 2021. "Synthesis of small and medium enterprise research in Ghana," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 451-468, December.
    3. Mary Juliet Nakabugo & Stephen Muathe & Evans Mwasiaji, 2023. "Conceptualizing Microfinance Services, Government Regulation and Performance in the Context of Coffee Entrepreneurs: A Theoretical Review," International Journal of Business and Management, Canadian Center of Science and Education, vol. 16(4), pages 1-1, February.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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