Microcredit as a catalyst for microbusiness growth: a myth or reality; a case of Asante-Akim Central Municipality, Ghana
Abstract This study investigates the effect of microcredit on the growth of microenterprises in the Asante-Akim Central Municipal Area of Ghana. The analysis reveals that while larger loan amounts positively influence business growth, high interest rates and rigid repayment terms impede these benefi...
Saved in:
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
SpringerOpen
2025-01-01
|
| Series: | Future Business Journal |
| Subjects: | |
| Online Access: | https://doi.org/10.1186/s43093-025-00426-9 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832585681245831168 |
|---|---|
| author | Ibrahim Musah |
| author_facet | Ibrahim Musah |
| author_sort | Ibrahim Musah |
| collection | DOAJ |
| description | Abstract This study investigates the effect of microcredit on the growth of microenterprises in the Asante-Akim Central Municipal Area of Ghana. The analysis reveals that while larger loan amounts positively influence business growth, high interest rates and rigid repayment terms impede these benefits. Entrepreneurs with higher education levels report better growth outcomes, emphasizing the significance of financial literacy and management skills. However, the evidence indicates that microcredit alone is insufficient to consistently drive sustainable growth for microenterprises, as structural challenges persist. Practical implications suggest that microfinance institutions (MFIs) should revise loan structures to include lower interest rates, extended grace periods, and flexible repayment options. Additionally, integrating financial literacy programs into microfinance services could enhance loan utilization and business outcomes. These findings challenge the universal applicability of microcredit as a growth catalyst, advocating for tailored approaches to better align financial products with the needs of microenterprises in emerging markets. |
| format | Article |
| id | doaj-art-01d81eea508c4eb5af3926d6fe6bdb37 |
| institution | Kabale University |
| issn | 2314-7210 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Future Business Journal |
| spelling | doaj-art-01d81eea508c4eb5af3926d6fe6bdb372025-01-26T12:35:44ZengSpringerOpenFuture Business Journal2314-72102025-01-0111111710.1186/s43093-025-00426-9Microcredit as a catalyst for microbusiness growth: a myth or reality; a case of Asante-Akim Central Municipality, GhanaIbrahim Musah0Department of Planning, Kwame Nkrumah University of Science and TechnologyAbstract This study investigates the effect of microcredit on the growth of microenterprises in the Asante-Akim Central Municipal Area of Ghana. The analysis reveals that while larger loan amounts positively influence business growth, high interest rates and rigid repayment terms impede these benefits. Entrepreneurs with higher education levels report better growth outcomes, emphasizing the significance of financial literacy and management skills. However, the evidence indicates that microcredit alone is insufficient to consistently drive sustainable growth for microenterprises, as structural challenges persist. Practical implications suggest that microfinance institutions (MFIs) should revise loan structures to include lower interest rates, extended grace periods, and flexible repayment options. Additionally, integrating financial literacy programs into microfinance services could enhance loan utilization and business outcomes. These findings challenge the universal applicability of microcredit as a growth catalyst, advocating for tailored approaches to better align financial products with the needs of microenterprises in emerging markets.https://doi.org/10.1186/s43093-025-00426-9MicrofinanceMicrocreditMicro enterprisesMSMEs (micro, small, and medium enterprises)Financial inclusionMicroenterprise growth |
| spellingShingle | Ibrahim Musah Microcredit as a catalyst for microbusiness growth: a myth or reality; a case of Asante-Akim Central Municipality, Ghana Future Business Journal Microfinance Microcredit Micro enterprises MSMEs (micro, small, and medium enterprises) Financial inclusion Microenterprise growth |
| title | Microcredit as a catalyst for microbusiness growth: a myth or reality; a case of Asante-Akim Central Municipality, Ghana |
| title_full | Microcredit as a catalyst for microbusiness growth: a myth or reality; a case of Asante-Akim Central Municipality, Ghana |
| title_fullStr | Microcredit as a catalyst for microbusiness growth: a myth or reality; a case of Asante-Akim Central Municipality, Ghana |
| title_full_unstemmed | Microcredit as a catalyst for microbusiness growth: a myth or reality; a case of Asante-Akim Central Municipality, Ghana |
| title_short | Microcredit as a catalyst for microbusiness growth: a myth or reality; a case of Asante-Akim Central Municipality, Ghana |
| title_sort | microcredit as a catalyst for microbusiness growth a myth or reality a case of asante akim central municipality ghana |
| topic | Microfinance Microcredit Micro enterprises MSMEs (micro, small, and medium enterprises) Financial inclusion Microenterprise growth |
| url | https://doi.org/10.1186/s43093-025-00426-9 |
| work_keys_str_mv | AT ibrahimmusah microcreditasacatalystformicrobusinessgrowthamythorrealityacaseofasanteakimcentralmunicipalityghana |