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Building resilience and sustainability in small businesses enterprises through sustainable venture capital investment in sub-Saharan Africa

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  • Ahmed I. Kato

Abstract

Venture capital (VC) has the potential to revolutionize sustainability in small and medium enterprises (SMEs), yet this area remains underexplored in sustainable finance. This study explores the role of VC in fostering resilience and sustainability within SMEs in sub-Saharan Africa, highlighting the need for increased sustainable financing to address regional challenges and promote resilient business models. While sustainable financing is crucial for promoting sustainable practices, small businesses face barriers in accessing funding opportunities to strengthen resilience. Through explanatory factor analysis (EFA) of data from 61 VC firms across three sub-Saharan African countries from 2015 to 2021, the study reveals that combining VC investments, resilience, sustainability practices, enhanced business performance, market share expansion and introducing new products and services leads to sustainable growth for SMEs. This has practical implications for investors, policymakers, and business owners seeking to elevate sustainability practices as well as enhance business performance through strategic VC financing. Furthermore, the study presents a framework for sustainable VC finance, stressing its role in driving sustainable growth and market expansion in small enterprises. This contributes to the literature by deepening understanding of the relationship between VC finance, resilience, sustainability, and business performance. Thus far, the varying levels of economic development and sectoral disparities across sub-Saharan Africa may impact the scalability and effectiveness of sustainability practices driven by VC. These contextual challenges raise concerns about the equitable distribution of VC benefits and the depth of their impact on small business resilience and sustainability ecosystems.This study unveils the transformative power of venture capital (VC) in driving sustainable growth and resilience within small and medium enterprises (SMEs) in sub-Saharan Africa. Our analysis of data from 61 VC firms reveals how strategic VC financing can unlock sustainable business models, enhancing resilience, market share, and innovation while addressing regional challenges. This research offers a critical roadmap for investors, policymakers, and business owners to leverage VC for sustainable development, contributing vital insights to the field of sustainable finance and promoting equitable access to capital for a more resilient and sustainable business ecosystem in sub-Saharan Africa.

Suggested Citation

  • Ahmed I. Kato, 2024. "Building resilience and sustainability in small businesses enterprises through sustainable venture capital investment in sub-Saharan Africa," Cogent Economics & Finance, Taylor & Francis Journals, vol. 12(1), pages 2399760-239, December.
    • Handle: RePEc:taf:oaefxx:v:12:y:2024:i:1:p:2399760
    DOI: 10.1080/23322039.2024.2399760
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    1. repec:bcp:journl:v:9:y:2025:i:10:p:141-172 is not listed on IDEAS
    2. Godbless Edward Eromafuru, 2025. "Blue ocean strategy, firms’s core competence, and the micro, small, and medium enterprises’ obsession for industry competitiveness," Future Business Journal, Springer, vol. 11(1), pages 1-21, December.
    3. Wen‐Min Lu & Jui‐Cheng Chen & Hsiu‐Fei Wang & Irene Wei Kiong Ting, 2026. "Balancing Efficiency and Culture: How Individualism Shapes the Environmental, Social, and Governance–Performance Nexus in Industrial Manufacturing Multinational Enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 35(1), pages 699-719, January.
    4. Ahmed Idi Kato, 2025. "Unveiling venture capital’s disruptive power; fuelling innovation and economic growth in high-impact firms in East Africa," Future Business Journal, Springer, vol. 11(1), pages 1-18, December.
    5. Michael Appiah & Emmanuel Baffour Gyau & Bright Akwasi Gyamfi & Simplice A. Asongu, 2025. "Balancing the Financial Trilemma: The Role of Financial Integration and Financial Development in Achieving Sustainable Development in Sub‐Saharan Africa," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(6), pages 8274-8293, December.

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