Effect of Microfinance Products on Small Business Growth: Emerging Economy Perspective

Abstract

Small businesses play a significant role in the economic stability and development of emerging economies, and access to financial services is crucial to their growth and performance. This study seeks to ascertain whether microfinance products such as loans, savings, insurance, and education affect small business growth in Ghana. The study uses descriptive and inferential statistics on responses of 248 small business owners for data analysis. Using multiple linear regression analysis, the study found that all the microfinance product or services positively affects small business growth, and the greatest influence is microloans. This study contributes massively to exact literature to the growth of microfinance institutions (MFIs) and small businesses in an emerging economy, Ghana. The study can assist MFIs to assess the effectiveness of their product or services, and can also serve as a guide to effective utilization of available scarce resources leading to the growth of small businesses in emerging economies.