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Return to Micro‐credit on Small‐scale Businesses: A Case Study of Ghanaian MFI
Author(s) -
Peprah James Atta,
Ayayi Ayi Gavriel
Publication year - 2016
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3139
Subject(s) - microfinance , business , propensity score matching , micro credit , micro enterprise , profit (economics) , stock (firearms) , matching (statistics) , scale (ratio) , finance , credit history , economics , economic growth , microeconomics , mechanical engineering , statistics , physics , mathematics , quantum mechanics , engineering
The paper uses two rounds of survey to examine the relative returns to micro‐credit for small‐scale businesses in two regions of Ghana. Propensity scores matching and the nearest neighbour matching are used to assess the return to micro‐loans on retail businesses of clients and non‐clients. Micro‐credit impacts on sales, stock, expenses and profit for clients as compared with non‐clients. Women‐owned businesses produce higher returns from micro‐credit than men‐owned businesses. Individual and enterprise characteristics influence access to micro‐credit. The paper offers policy recommendations to microfinance institutions on whom and which business activity to give credit. Copyright © 2015 John Wiley & Sons, Ltd.