scholarly journals The Relentless Pursuit of Financial Capital for Micro-enterprises: Importance of Trust and Social Capital

2011 ◽  
Vol 6 (2) ◽  
pp. 78-97 ◽  
Author(s):  
Adam Brown ◽  
Steve Garguilo ◽  
Khanjan Mehta
Keyword(s):  
Social Capital ◽  
Small Businesses ◽  
Financial Capital ◽  
Business Strategies ◽  
Small Business Owners ◽  
Microfinance Institutions ◽  
Credit Associations ◽  
Credit Cooperatives ◽  
Savings And Credit Associations ◽  
Complex Relationships

In developing countries, prospective entrepreneurs struggle with getting access to financial capital to start small businesses. Formal lending sometimes works for solidarity groups of small business owners who approach microfinance institutions (MFIs) to access capital for expanding their businesses, but MFIs do not typically lend money to entrepreneurs interested in starting new businesses. In order to create an environment where startup business and entrepreneurship thrives, it is crucial to meet the needs of the marginalized entrepreneurs. As a response to this trend, the informal lending and credit market in rural Kenya is growing fast, but little research is available regarding the mechanics of this system. Instead of decomposing the microfinance industry into a binary relationship between MFIs and their clients, this paper views the financial capital industry as a multi-actor system (informal lenders, rotating savings and credit associations, solidarity groups, savings and credit cooperatives and microfinance institutions) and discusses how their success is mutually dependent. This paper delves further into the dynamics between these actors and the role of trust and social capital in their complex relationships. Entrepreneurs targeting developing communities need to understand these relationships and challenges to develop business strategies that make their products and services accessible through appropriate partnerships.

Growth and Development of Small Business Through Microfinance Activities in Nepal

2020 ◽  
Vol 1 (1) ◽  
pp. 26-34
Author(s):  
Chandra Prasad Dhakal
Keyword(s):  
Small Business ◽  
Financial Services ◽  
Small Businesses ◽  
Growth And Development ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Business Owners ◽  
Small Business Owners ◽  
Microfinance Institutions ◽  
Economic Activities

Small businesses play important role for economic development and stability. It develops access in financial services through enhancing economic activities. The study analyzes the growth and development of small businesses that enhance through the support of micro finance in Nepal. Descriptive and inferential were used to collected data and collected data were analyzed through using multiple linear regression analysis. Only 124 small business owners were selected for this study. The study helps to find out the growth of microfinance institutions (MFIs) and small businesses in emerging economy in Nepal. It also assists MFIs to assess the effectiveness of their services and help to efficient utilization of available resources in the economy of Nepal.

EXPLORING DECISION STRATEGIES AND EVALUATIONS OF PERFORMANCE BY NETWORKED AND NON-NETWORKED SMALL U.S. BUSINESSES

2005 ◽  
Vol 10 (02) ◽  
pp. 167-186 ◽  
Author(s):  
NANCY J. MILLER ◽  
TERRY L. BESSER
Keyword(s):  
Small Businesses ◽  
Business Performance ◽  
Formal Group ◽  
Business Owners ◽  
Business Strategies ◽  
Small Business Owners ◽  
Voluntary Organizations ◽  
Strategic Decisions ◽  
Small Communities ◽  
Initial Support

A strategic network perspective established the theoretical foundation for exploring aspects of business management in 383 small businesses predominantly operating in small communities across the U.S. It was proposed that those owner/managers involved in formal voluntary organizations to promote business effectiveness would differ in their strategic decisions and evaluations of performance from businesses without such formal group affiliations. Business strategies assessed involved the emphasis placed on employees, customers, and community, and the effect of these three variables in explaining four elements of business performance. Networking businesses were found to place more emphasis on strategies dealing with employees, customers, and community than non-networking businesses. Final results suggested that network membership held a direct effect on business strategies, and that these strategies held varying direct effects on perceptions of business performance. Findings offer initial support for strategic network theory as well as practical information for small business owners considering network membership.

scholarly journals Determinants of Micro-Enterprise Success through Microfinance Institutions: A Capital Mix and Previous Work Experience

2020 ◽  
Vol 21 (2) ◽  
pp. 803-823
Author(s):  
Waseem Ul Hameed ◽  
Hisham Bin Mohammad ◽  
Hanita Binti Kadir Shahar
Keyword(s):  
Social Capital ◽  
Human Capital ◽  
Work Experience ◽  
Financial Capital ◽  
Primary Data ◽  
Research Approach ◽  
Capital Social ◽  
Microfinance Institutions ◽  
Enterprise Success

The prime objective of the study is to highlight the role of the capital mix (financial capital, social capital, human capital) on women micro-enterprise success with moderating role of previous work experience. Women owned micro-enterprise success is less as compared to the male owned micro-enterprsie, particularly in Pakistan. Rate of faliure in women micro-enterpeise is more, that is the reason women community is one of the most vulnerable group worldwide. It is evident from literature that less attention has been paid to highlight the importance of three types of capital for women micro-enterprise. To adress this issue, the current study adopted quantitative research approach and based on cross-sectional research design. Primary data was collected by using 5-point Likert scale. Questionnaires were distributed among the owners of women micro-enterprise in Pakistan by using area cluster sampling. SmartPLS 3 was used to analyze the data. It is found that financial capital, social capital and human capital has significant positive relationship with women micro-enterprise success and previous work experience moderates the relationship. Hence, this study contributed by developing a unique framework for women micro-enterprise success. It will be beneficial for practitioners to enhance women micro-enterprise success rate.

Gender Differences in ICT Use Among Small Business Owners in Ghana

2021 ◽  
pp. 1378-1391
Author(s):  
Alice Etim ◽  
David N. Etim ◽  
George Heilman
Keyword(s):  
Gender Differences ◽  
Small Business ◽  
Small Businesses ◽  
Business Owners ◽  
Small Business Owners ◽  
Microfinance Institutions ◽  
Warning Signals ◽  
Disadvantaged Populations ◽  
The Poor ◽  
Information And Communication

In the last two decades, microfinance institutions across regions have helped to financially build small businesses in areas of disadvantaged populations. The efforts in providing entrepreneurs with small non-collateralized loans (or micro-loans) along with developing cooperative programs for entrepreneurs were reported in earlier studies as being helpful in alleviating some borrowers from extreme economic poverty. However, early warning signals were raised about whether microfinance institutions were benefiting themselves more than the poor. This article assesses the differences in attitudes toward the use of information and communication technology among small business owners in Ghana that have access to micro-loans. The findings indicate significant differences between interest payers and interest non-payers based on region of the country, age, education, and membership in an entrepreneurship program.

scholarly journals Institutions, Corruption and Microfinance Viability in Developing Countries: the Case of Ghana and Nigeria

2021 ◽  
Vol 2021 (2) ◽  
pp. 61-70
Author(s):  
Yahaya Alhassan ◽  
Uzoechi Nwagbara
Keyword(s):  
Developing Countries ◽  
Small Businesses ◽  
Business Owners ◽  
Small Business Owners ◽  
Microfinance Institutions ◽  
Institutional Void ◽  
High Incidence ◽  
Business Opportunities ◽  
Challenges And Opportunities ◽  
High Level

This article focuses on the role corrupt institutions (microfinance institutions) play in microfinance not being accessible for business development in Africa. It specifically sheds light on the contexts of Nigeria and Ghana to tease out the challenges and opportunities for small businesses consequent upon a culture of corruption in these countries and associated challenges for small business owners and entrepreneurs as well as microbusiness development. As well-known, in many developing countries with a high level of corruption, there is potentially a high incidence of institutional void, which presents setback and challenges for businesses to thrive. Microbusiness development relies largely on effective institutions to develop, and in situations where institutions are corrupt, these challenges are rather redoubled thus posing a threat to entrepreneurship development. Therefore, these contexts enable us to understand and interrogate the challenges facing microbusiness development, where corrupt microfinance institutions exist, as well as business opportunities if these corrupt institutions were not present. Thus this paper argues that for businesses to thrive enabling and effective institutional mechanisms are crucial, which will facilitate opportunities for microbusiness development.

scholarly journals Small Business Strategies for Sustainability Beyond 10 Years

2017 ◽  
Vol 16 (1) ◽  
Author(s):  
Gabriel E Warren ◽  
Lynn Szostek
Keyword(s):  
Small Business ◽  
Financial Management ◽  
Small Businesses ◽  
Business Models ◽  
Business Owners ◽  
Small Business Administration ◽  
Business Strategies ◽  
Small Business Owners ◽  
Sustainable Business ◽  
The U.S

Small businesses are vital to the health of the U.S. economy, as they account for approximately 50% of all jobs and 99% of all firms. Historically, there has been a problem with small businesses being able to sustain their operations beyond 10 years. According to the U.S. Small Business Administration, when averaged across all industries, approximately 75% of new businesses failed within the first 5 years. The purpose of this multiple case study was to explore the business strategies some small business owners use to sustain their company beyond 10 years of operation. Data were gathered through semistructured interviews and a review of financial documents with a purposive sample of eight small business owners. Transcript reviews and member checking were completed to assure credibility and trustworthiness. Based on the methodological triangulation of the data sources collected, four emergent themes were identified after completing the data analysis: (a) building relationships, (b) finding your passion, (c) enhancing business knowledge, and (d) ensuring financial management. Small business leaders and their stakeholders may use the findings to advance the evolution of sustainable business models that meet the needs of small business owners.

Gender Differences in ICT Use Among Small Business Owners in Ghana

2019 ◽  
Vol 8 (1) ◽  
pp. 1-14
Author(s):  
Alice Etim ◽  
David N. Etim ◽  
George Heilman
Keyword(s):  
Small Business ◽  
Information And Communication Technology ◽  
Communication Technology ◽  
Small Businesses ◽  
Business Owners ◽  
Small Business Owners ◽  
Microfinance Institutions ◽  
Ict Use ◽  
The Poor ◽  
Information And Communication

In the last two decades, microfinance institutions across regions have helped to financially build small businesses in areas of disadvantaged populations. The efforts in providing entrepreneurs with small non-collateralized loans (or micro-loans) along with developing cooperative programs for entrepreneurs were reported in earlier studies as being helpful in alleviating some borrowers from extreme economic poverty. However, early warning signals were raised about whether microfinance institutions were benefiting themselves more than the poor. This article assesses the differences in attitudes toward the use of information and communication technology among small business owners in Ghana that have access to micro-loans. The findings indicate significant differences between interest payers and interest non-payers based on region of the country, age, education, and membership in an entrepreneurship program.

Resilience in the context of two traditional Spanish rural sectors: an exploratory study

2015 ◽  
Vol 9 (2) ◽  
pp. 182-203 ◽  
Author(s):  
Abel Duarte Alonso
Keyword(s):  
Small Business ◽  
Olive Oil ◽  
Small Businesses ◽  
Business Environment ◽  
Business Owners ◽  
Business Strategies ◽  
Small Business Owners ◽  
Online Questionnaire ◽  
Economic Implications ◽  
Content Type

Purpose – The present study examines ways in which micro and small business owners and managers in the olive oil industry seek to adapt to emerging challenges and build resilience. In an increasingly demanding business environment, the ability to become resilient and be able to adapt to new or existing challenges is crucial. However, in what ways do micro and small business owners and managers seek to adapt to emerging challenges and build resilience? The present study examines these issues among micro and small wine and olive oil producers. Design/methodology/approach – An online questionnaire was designed to gather the views of respondents on challenges, impacts of these challenges and strategies they consider to adapt to current challenges. A total of 93 winery owners/managers and 52 olive growers participated. Findings – The findings identify increasing costs, decreasing consumption and the effects of the economic crisis as the most significant barriers, with impacts in the form of loss of trust in government institutions and loss of confidence in a soon economic recovery. To adapt and become resilient, enhancing promotional, educational and diversification activities, such as starting or growing exports, or becoming more involved in technology and social media are perceived as fundamental business strategies. Originality/value – In considering elements related to the theory of resilience, the study provides empirical evidence of adaptive strategies among micro and small businesses, as well as ways to achieve resilience. Overall, the findings have important socio-economic implications for various stakeholders, including the sectors involved, government agencies, and ultimately for consumers, and local communities where businesses operate.

scholarly journals WORKING CAPITAL FINANCING PREFERENCE AMONG SMALL BUSINESSES IN CAMBODIA

2020 ◽  
Vol 2 (No.1) ◽  
pp. 48-61
Author(s):  
Muhammad M. Ma'aji ◽  
Phouneta Sok ◽  
Chanramy Long
Keyword(s):  
Small Businesses ◽  
Bank Loan ◽  
Information Costs ◽  
Working Capital ◽  
Significant Information ◽  
Credit Associations ◽  
Financing Preference ◽  
Savings And Credit Associations ◽  
Capital Financing ◽  
Internal Sources

The purpose of this paper is to investigate working capital financing preference among small businesses in Cambodia using a quantitative and qualitative approach. Small business often relies heavily on internal finance as a major source of short-term finance for working capital needs. This is because small businesses are likely to face problems associated with their size when accessing external finance, such as information asymmetry and higher agency costs. Interestingly, using descriptive statistics and inferential statistics, the findings lead us to believe that these firms mostly relied on internal sources (retained profit, early settlement discount, delayed payment to suppliers) of finance as compared to external sources (bank loan and equity). In some cases, they have to rely on informal sources (private, family, friend, money counting/lenders, funds/wealthy families, rotating savings and credit associations) to finance working capital requirement. These results suggest that firms experience significant information costs that prevent them from gaining access to traditional sources of financing. The findings of the study will be useful to the financial institutions that fund SMEs and can help the policymakers to formulate strategies and programs that will support SMEs at different stages of the financial chain in Cambodia.

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