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Exploring High Performing Businesses of Microloan Borrowers in Northern Gana : an exploratory qualitative research

Dubbink, A.F. (2015) Exploring High Performing Businesses of Microloan Borrowers in Northern Gana : an exploratory qualitative research.

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Abstract:Due to the fact that poverty appears to mean different things to different people in different parts of the world (Karelis, 2007), a large number of interventions and solutions arise in the struggle against poverty. One possible solution that has grown rapidly in popularity and scope in recent decades is the area of microcredit. Looking more closely to the concept of microcredit, it can be concluded that studies found contradictory results about the effectiveness of microcredit on reducing poverty. For instance, some microloan borrowers create high performing businesses while others fail and, in turn, create low performing businesses. This study investigates why only a small minority of borrowers, who take microloans in developing countries, is able to create high performing businesses. In addition, the primary purpose of this study is to find out which concepts have an influence on the degree of business performance of borrowers who take a microloan. Based on this purpose, the following research question is formulated: Why is only a small minority of borrowers, who take microloans in developing countries, able to create high performing businesses? Earlier research discussed the effectuation theory, which is used as an overall classification in this research. This theory assumes that an entrepreneur begins with three categories of means – their own traits, tastes and abilities; the knowledge corridors they are in; and the social networks they are a part of. On the basis of this classification a theoretical framework is written, eight propositions were formulated and a conceptual framework was composed. In order to answer the research question, twenty respondents were divided into two groups – ten borrowers who create high performing businesses and ten borrowers who create low performing businesses – and interviews were conducted. Besides documents, received from UMO staff, were analyzed and a daily diary was kept to write down all relevant observations made. Subsequently, the data was analyzed qualitative as well as quantitative. Five specific findings emerged from the qualitative data analysis. On the other hand, quantitative data analysis transformed the interview answers into a six point Likert scale and data was analyzed with the help of SPSS Statistics 17.0. The findings of this study, taking qualitative and quantitative together, demonstrate that future orientation of the borrower has a (significant) positive influence on the business performance of the borrower. These findings suggest that business performance of North Ghanaian women borrowers can be improved by developing a clear future orientation, consisting of understanding the risk that microloans present, having a clear vision and clear ideas to achieve this vision and having the ability to clearly discuss the terms of the loans. In a practical point of view, this study might inspire microcredit organizations to give more specific training to their microcredit borrowers to obtain future orientation. On the other hand, in a theoretical point of view, this study contributes to the modest research done about the businesses that borrowers start with microloans. At the same time it contributes to previous research by focussing on performance of women-owned businesses in developing countries. This study might inspire researchers to investigate the influence of other people, business and environmental factors on the business performance of the borrower.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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