How does microfinance enhance entrepreneurial outcomes in emerging economies? The mediating mechanisms of psychological and social capital

Alexander Newman, Susan Schwarz, Daniel Borgia

Research output: Contribution to journalArticlepeer-review

Abstract

In this article, a conceptual framework and research propositions are developed to explain how microfinance provision can translate into new venture creation and existing venture growth in an emerging economy context by engendering higher levels of psychological and social capital in clients. In doing this, the extent to which microfinance institutions provide business support and opportunities for social interaction are identified as factors which may strengthen the impact of microfinance provision on psychological and social capital, especially for poor entrepreneurs in resource-constrained settings. The conceptual framework and research propositions developed will be of use to academics in designing an agenda for future empirical research. In addition, they will help policymakers and microfinance providers to better design microfinance initiatives that enhance the well-being of clients and maximise their entrepreneurial outcomes.
Original languageEnglish
Pages (from-to)158-179
Number of pages22
JournalInternational Small Business Journal
Volume32
Issue number2
Early online date30 Dec 2013
DOIs
Publication statusPublished - 1 Mar 2014

Keywords

  • emerging economies
  • entrepreneurial outcomes
  • microfinance
  • psychological capital
  • support mechanisms
  • social capital

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