FNGOs and microfinance delivery: The institutional logic perspective

From an institutional theory perspective, this study investigates 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. Adopting a multiple linear regression analysis, the study uses primary data collected from 506 Ghanaian MSEs who are engaged in various economic activities. 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. Secondly, the social welfare logic adopted by FNGOs seems to be responsive to the needs and growth of MSEs in Ghana. However, the cost of microcredit remains a drawback to the performance of MSEs in Ghana. Also, employment decisions by MSEs might not be based solely on the profitability and growth of the enterprises. However, other socially-oriented reasons are responsible.