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The influence of microcredit financing conditions on the financial performance of microenterprises in Burkina Faso

Author

Listed:
  • Pascal Bougssere

    (UV-BF - Université virtuelle du Burkna Faso)

  • Mamadou Toe

    (UTS - Université Thomas Sankara)

  • Wend-Kuuni Raïssa Yerbanga

    (UTS - Université Thomas Sankara)

Abstract

This article examines the influence of microcredit financing conditions on the financial performance of microenterprises in Burkina Faso. To this end, an analysis was carried out using a linear model for a sample of 129 microenterprises based on panel data from 2017 to 2019. The results obtained using the Feasible Generalized Least Squares (FGLS) method show that the amount of microcredit and the repayment period have a positive impact on the financial performance of microenterprises. In contrast, the interest rate, proximity to microfinance institutions (MFIs) and the gender of the business owner negatively affect this performance. These results emphasize that in the Burkinabe context, proximity to MFIs does not guarantee the profitability of microenterprises, but rather benefits MFIs in repaying loans and expanding their portfolio. They also indicate that women-led micro-enterprises are less profitable because they have difficulties accessing credit, particularly due to a lack of collateral. Conversely, businesses run by educated owners have better financial performance.

Suggested Citation

  • Pascal Bougssere & Mamadou Toe & Wend-Kuuni Raïssa Yerbanga, 2024. "The influence of microcredit financing conditions on the financial performance of microenterprises in Burkina Faso," Post-Print hal-04692353, HAL.
    • Handle: RePEc:hal:journl:hal-04692353
    DOI: 10.5281/zenodo.13622970
    Note: View the original document on HAL open archive server: https://hal.science/hal-04692353
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    References listed on IDEAS

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    Keywords

    Financing conditions; microcredit; microenterprise; financial performance;
    All these keywords.

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