Changing role of finance in rural small enterprise growth in Ghana

Abstract

Purpose This study aims to build on the emerging understanding that small enterprise growth results from a confluence of different factors. This study seeks to provide additional insights into the nature of these factors and how they influence the growth process of small businesses in rural communities in Ghana. Design/methodology/approach This study undertook a qualitative investigation of 28 small enterprises in three Ghanaian rural districts. Interviews were conducted with owners of the businesses. Findings The results indicate that growth-enabling conditions such as entrepreneurial ambition, market demand and infrastructure combine with finance to define small enterprise growth trajectories in rural Ghana. However, finance may not always be the major factor driving the growth. Originality/value Most past studies about small enterprise growth in Africa have concentrated on firms in urban communities and see finance gap as the most serious constraint to growth. This study joins the few recent studies about rural enterprise growth in Ghana, showing that the growth of these businesses depends on an interplay of a variety of factors.