Does Managerial Training have any impact on the performance of MSE Managers? Empirical evidence from Ghana

Received the best full paper award in the performance management trackAdopting the human capital theory as a lens, this study investigates the impact of managerial training on the performance of the managers of Micro and Small Enterprises (MSEs) in Ghana. The study uses primary data collected from 506 MSEs who are clients of Financial Non- Governmental Organisations (FNGOs) in the Volta Region of Ghana. Managerial Training (MT) and Performance has been measured on a five-point Likert scale anchored by strongly disagree (1) and strongly agree (5). MT has been measured using 4 main constructs namely, training content, training efficiency, training frequency and training accessibility whilst performance was measured using 12 items. The study controlled for business age, industry category, manager’s educational level and gender. The study shows that managerial training content, efficiency, frequency, and accessibility are statistically significant in explaining performance among MSE managers in Ghana. Secondly, the study also shows that industry category, managers educational level, and business age influences the performance of managers. However, gender is statistically insignificant and does not have any impact on the performance of MSE managers in Ghana. The study, therefore, argues for the delivery of managerial training which is content-rich, efficient, frequent and accessible to MSE managers to develop their managerial capabilities (Fatoki, 2011; Newman et al., 2014)

Tax compliance cost and international trade in Africa

International trade in Africa could be one of the antidotes to the precarious poverty and economic deficiency in which the continent finds itself. An outward orientation towards international trade opens the continent to many opportunities including an increase in productivity and the development of redistributive channels for both natural and manufactured products. Resources in Africa could also be efficiently allocated and other consumption opportunities will be exploited when international trade is encouraged and reformed. However, one of the major bottlenecks which affect the growth of international trade in the continent is tax compliance costs. Taxation and its compliance cost could be the most burdensome and costly business activity which has the potential to discourage business growth and investments. Tax compliance costs which include the cost and time involved in complying with various tax regulations in Africa could be a disincentive to trading firms. Adopting the institutional theory, this study has investigated the impact of tax compliance cost on international trade in Africa. The evidence shows that while the number of taxes paid by firms in a year and the tax rate as a percentage of commercial profit has a negative impact on international trade in Africa. However, the time taken for tax registration/compliance and post-tax filing time of firms seem not to have any immediate impact on international trade in Africa. This paper, therefore, argues that Africa needs tax reforms in the form of self-assessments, simplification of tax administration, risk-based inspections and electronic submissions of tax returns in order to reduce the current level of tax compliance burden on firms in Africa

The nexus between technology absorption and firm growth in Africa: A resource-based perspective

By drawing upon the Resource-Based View (RBV) theory, this study investigates the effects of human capital, credit, and electricity on technology absorption among firms in Africa. The technological absorption index for 40 African countries was used to measure technological diffusion and the capacity to absorb new technology among African firms. Secondly, the World Bank’s data on access to credit and electricity for 40 African countries was also employed as explanatory variables. The findings indicate that to support technological absorption and diffusion among African firms, a broad access to credit, electricity and effective human capital development is imperative. Access to credit, electricity and human capital were significant in explaining variances in technological absorption. More so, whiles education quality is significant, African governance structures are insignificant in driving technological absorption

Reflecting on Micro Finance in Poverty Reduction

Development policy has increasingly shifted towards expanding financial services to the poorer sections of the populationfollowing the Grameen Bank success. In spite of this and other micro finance success stories, the effectiveness of microfinancein reducing poverty continues to be questioned with some arguing that micro finance programmes have little to no impact onpoverty reduction. Whilst demanding empirical evidence of positive impact, critics of microfinance as poverty reductioninstrument continue to ask lingering questions like who is the programme supposed to reach? Who is it reaching? What impactis it making on the lives of the poor? On the other hand, some are steadfast that a well-designed microfinance programme canchange the lives of the poor at the individual, household, enterprise and community levels and help raise the standard of livingof the poor out of the poverty. In this study, the researchers enter the debate by reviewing both empirical and normativeliterature to determine the extent to which microfinance is able to reduce poverty. Based on insights gained, it is concluded thatmicro finance is not fulfilling its original mandate of extricating the poor from poverty or vulnerability to it to the level of comfort.We also provide recommendation for policy and practice

Does institutional logic matter in microfinance delivery? An empirical study of microfinance clients

Purpose: From an institutional theory perspective, the purpose of this paper is to investigate the combined impact of financial capital (microcredit) and human capital development (entrepreneurship training) delivered by financial non-governmental organisations (FNGOs) on the performance of micro and small enterprises (MSEs) in Ghana. Design/methodology/approach: Adopting a multiple linear regression analysis, the study used primary data collected from 506 Ghanaian MSEs. Microcredit was measured using four main constructs, namely, loan cost, loan amount, the flexibility of loan repayment and loan accessibility. Entrepreneurship training was measured using four main constructs, namely, training content, training efficiency, training frequency and training accessibility. MSE performance was also measured using three main indicators, namely, sales, employment and profitability growth. The study controlled for business age, industry category, manager’s educational level and gender. Findings: The results of this study show that the combined delivery of financial and human capital development by FNGOs has a significant impact on MSE performance. The social welfare logic adopted by FNGOs seems to be legitimate to the needs and growth of MSEs in Ghana. However, the cost of microcredit remains a drawback, constraining the performance of MSEs in Ghana. Research limitations/implications: This study was carried out in the Volta Region, which is one of the ten regions of Ghana. Even though the sample size suffices, the findings from this study could not be generalised to the whole of Ghana. Also, this study is a quantitative study and could benefit from a triangulated method where the qualitative inputs could offer insights into the findings in this study. Originality/value: Theoretically, this study contributes to the understanding of institutions and the type of impact they have on the growth of MSEs. Practically, the provision of a conducive environment and access to financial capital is crucial to the growth of MSEs. Also, the adoption of the social welfare logic in microfinance delivery could be one of the major steps in promoting the performance of MSEs in Ghana.</p

FNGOs and financial inclusion:investigating the impact of microcredit on employment generation in Ghana

Financial Non-Governmental Organisations (FNGOs) are regulated microfinance institutions (MFIs) that operate with a social welfare logic in the delivery of microcredit to the financially excluded in Ghana. The microcredit is aimed at supporting the financially excluded individuals to create sustainable Micro and Small Enterprises (MSEs) for the generation of both skilled and unskilled employment. From the institutional theory perspective, this study aims at investigating the impact of microcredit provided by FNGOs on employment growth among MSEs in Ghana. The major contribution of this study is the fact that, there is a little study on FNGOs and their impact on employment growth in the Ghanaian context. Therefore, this is one of the few studies which highlights the role of FNGOs in promoting financial inclusion through the provision of microcredit for employment generation purposes. Through a multiple regression analysis, the study uses primary data collected from 506 MSEs in Ghana. The results show that microcredit which is flexible in repayment mode, accessible, and adequate has a positive impact on employment generation among MSEs in Ghana. However, the current cost of microcredit in Ghana has a negative impact on employment growth among MSEs in Ghana

IMPACT OF CREDIT RISK MANAGEMENT PRACTICES ON MICRO FINANCING THE POOR FOR POVERTY ALLEVIATION IN AFRICA: INSIGHTS FROM GHANA

Published ThesisAlthough Africa has experienced encouraging economic growth over the past decade, the livelihood and living conditions of most on the continent does not reflect this trend. Ghana is no exception. Even though Ghana has made modest gains in economic growth and productivity, livelihoods, unemployment, diseases and above all the number one enemy poverty among the Ghanaian population continue to soar above acceptable limits. In most developing countries like Ghana, microfinancing the poor for them to engage in entrepreneurial activity has been used to fight this number one enemy, poverty. To protect their investment, microfinance institutions (MFIs) apply credit risk management. Although credit risk management is essential to safeguarding the credit portfolio, deposits and improve loan recovery, it is essential that MFIs adopt pro-poor credit risk management practices in order to provide access to entrepreneurial finance to these ‘bottom of the ladder’ who are often marginalised from access to finance from mainstream banks. The problem is that, when credit risk management practices are too stringent, it creates the potential of denying the poor access to entrepreneurial finance, with consequences for poverty reduction. In fact, some commentators strongly suggest that financing the poor to engage in entrepreneurial activity is hampered by less than pro-poor credit risk management practices of lending institutions. This assertion has yet to be tested on MFIs in the developing country context including Ghana where microcredit has become a flourishing business. A knowledge gap therefore exists insofar as the impact of credit risk management practices on poverty alleviation through microfinancing the poor to engage in entrepreneurship is concerned. To bridge this gap, this study investigated the microfinance credit risk management practices of MFIs operating in the Greater-Accra Region of Ghana to assess the extent to which such practices hinder the poor from accessing entrepreneurial finance and impact thereof on poverty alleviation/ reduction. In the study, the Greater Accra Region is used as a test case for Ghana by involving respondents from purposefully selected 141 MFIs in the region comprising of 378 officers of MFIs and 1,235 MFI loan beneficiaries. The results reveal that stringent credit risk management practices exist among MFIs. It was also found that most of the poor who are willing to engage in entrepreneurship are unable to obtain finance due to credit risk management practices that they perceive as are too stringent. Furthermore, it was found that MFIs that adopt pro-poor credit risk management practices attract more poor clients, and such clients become successful in their businesses. Based on the above and other findings, recommendations are made which if carefully implemented can make microcredit risk management pro-poor, while minimising credit risk for MFIs. Recommendations are also made for further research

The impact of FNGO services on the performance of micro and small enterprises: Empirical evidence from the Volta Region, Ghana

A thesis submitted in partial fulfilment of the requirements of the University of Wolverhampton for the Degree of Doctor of Philosophy.Financial Non-Governmental Organisations (FNGOs) are regulated microfinance institutions (MFIs) that operate with the social welfare logic in the delivery of Microcredit (MC) and Entrepreneurship Training (ET) to the poor in Ghana. The provision of these two capitals (MC and ET) is aimed at supporting the poor to create sustainable Micro and Small Enterprises (MSEs) which is aimed at generating both skilled and unskilled employment. The major aim of this study is to investigate the impact of MC and ET delivered by FNGOs on the performance of MSEs in Ghana. Theoretically, the study adopts both the Institutional Theory and the Resource-Based View theory as the underlying theoretical frameworks, assuming that institutional and resource factors have a great influence on FNGOs in their delivery of MC and ET to MSEs in Ghana. The research design adopted in undertaking this study is based on the pragmatic research philosophy. Specifically, the mixed strategy with an explanatory triangulation method has been used. The mixed method has been adopted purposely for model testing as well as for exploring various issues on FNGOs and their role in the performance of MSEs. Primary data were collected through a quantitative method using a survey as well as through qualitative interviews. Adopting a stratified random sampling method, a total of 720 self-administered questionnaires were sent out in March 2017 to MSEs in the Volta Region of Ghana to collect primary data. Out of the number sent, 506 questionnaires were retrieved generating a response rate of 70.2%. Also, interviews were conducted with 10 MSEs. A multiple regression model was applied in measuring the impact of MC and ET on the performance of MSEs. The findings suggest that firm characteristics such as gender, managers educational level, industry category and business age correlate positively with employment sales and profitability growth which are statistically significant at 1% level. Secondly, the study also found that both MC and ET factors have a significant impact on MSE performance in the areas of employment, sales and profitability at 1% significant level. The qualitative findings also support the model tested in this study in the sense that the combined approach of both MC and ET have a significant impact on MSE performance in Ghana. This study has made two main contributions. Firstly, the provision of MC by FNGOs can only have the desired impact on the performance of MSEs if it is combined with entrepreneurship training, thereby leading to a sustainable employment, sales and profitability growth. Therefore, by using the 506 MSEs financed by FNGOs in the Volta region of Ghana, this study has for the first time in the Ghanaian microfinance landscape tested an empirical model and came out with meaningful findings for effective integration of ET into microfinance to improve the delivery of financial services to MSEs in Ghana by FNGOs and other socially oriented MFIs. The study has therefore developed a practical framework for ensuring that ET is provided alongside the delivery of MC in order to have the desired impact on the performance of MSEs. The study provided implications for policy and practice for making MC and ET more accessible to MSEs to achieve the desired goal of creating employment. Secondly, even though FNGOs play a very important role in providing entrepreneurial finance to MSEs particularly in developing countries, it has received insufficient research attention. This study has, therefore, added to the scanty research available about FNGOs and their contribution to entrepreneurship development and poverty reduction in developing countries