Start-up financing and expectations for growth: young and older entrepreneurs in Sub-Saharan Africa

Abstract

Financing is well-known to be important for expanding a new enterprise, so financing promotes expectations for growth of jobs in the enterprise. But it is also well-known that financing is less available to young entrepreneurs than to older entrepreneurs. The purpose here is to examine how age and financing affect expectations for growth of entrepreneurs in Sub-Saharan Africa. The sample is 12,853 entrepreneurs starting a business in Sub-Saharan Africa surveyed in the Global Entrepreneurship Monitor in 2012 to 2014; in the ten countries: Angola, Botswana, Ethiopia, Ghana, Malawi, Namibia, Nigeria, South Africa, Uganda and Zambia. Analyses by multivariate linear modelling show that the very young (age 18-24 years) have less financing but higher growth-expectations than even the young adults (age 25-34). Financing benefits expectations, especially for the very young entrepreneurs. These findings indicate that a policy of providing more financing for the very young entrepreneurs will lead to more expansion and job-growth.