Access to microfinance and intra household business decision making: Implication for efficiency of female owned enterprises in Ghana

Inadequate access to credit contributes to poverty among especially women in developing countries. It is evidenced that in patriarchal societies, males are likely to influence investment decisions when loans are granted to their spouses or female relatives. However the existing literature is inconclusive on whether this influence is positive or negative. This study empirically examines the impact of access to microfinance by women, and male involvement in business decision making on efficiency of small scale enterprises in northern Ghana. We found very low level mean technical efficiency of 40% indicating that output of the enterprises could potentially be more than doubled without employing additional inputs. Moreover access to microfinance increases efficiency by 11%; and enterprises with male spousal influence were less efficient than their counterparts that were independently managed by the women. Furthermore, enterprises owned by women who managed more than one business operated at relatively lower efficiency levels.

► We investigated the impact of microfinance and spousal influence on female owned microenterprises in rural Ghana.
► The enterprises operate at less than 50% technical efficiency level.
► Access to microfinance increases efficiency by 11%.
► The enterprises with male spousal influence or dominance were less efficient.
► Multiple enterprise owners operated at relatively lower efficiency levels.