Informal sector enterprises constitute about 50 per cent of informal sector employment. If these enterprises can grow then poverty can be impacted substantially. Microcredit was visualized as a support to help micro-enterprises generate income and impact poverty. Studies across the globe suggest that the impact created by microcredit is not substantial. This mixed-method, two-phase study aims to identify the reason for lack of impact. Findings of the first phase exploratory study suggest that there are a few determinants of growth which are as critical as credit for growth. These determinants are market location, value chain, gender of the entrepreneur, investment, cluster, and entrepreneurship of the entrepreneur. In Phase 2 these determinants are confirmed through multinomial regression of data from a larger sample size in a different location. Credit is the control variable. All determinants except entrepreneurship are statistically significant in explaining the role of these determinants in the growth of micro-enterprises. These findings can inform policy about the components of enabling conditions for micro-enterprises.

Adams, S. (2010) ‘The impact of microfinance on maize farmers in Nkoranza (Brong Ahafo Region of Ghana)’, Journal of Management Research 2(2): E7 [online] <https://pdfs.semanticscholar.org/4367/677624b14a619b98dc9dbbf917aee47a5a68.pdf> [accessed 12 June 2017].

Asian Development Bank (ADB) (1997) Microenterprise Development: Not by Credit Alone, Manila: Asian Development Bank.

Attanasio, O., Augsburg, B., de Haas, R., Fitzsimons, E. and Harmgart, H. (2014) Group Lending or Individual Lending? Evidence from a Randomized Field Experiment in Mongolia [pdf], WZB Discussion Paper, SP II 2014–3, Wissenschaftszentrum Berlin für Sozialforschung (WZB), Berlin <https://www.econstor.eu/bitstream/10419/93060/1/779360893.pdf> [accessed 7 April 2020].

Augsburg, B., de Haas, R., Harmgart, H. and Meghir, C. (2012) Microfinance, Poverty and Education [online], IFS Working Papers No. W12/15 <http://dx.doi.org/10.1920/wp.ifs.2012.1215> [accessed 20 July 2017].

Banerjee, A., Duflo, E., Glennerster, R. and Kinnan, C. (2013) Miracle of Microfinance [pdf], National Bureau Of Economic Research, Working Paper 18950 <https://www.nber.org/papers/w18950.pdf> [accessed 18 June 2017].

Bateman, M. and Chang, H.J. (2010) Microfinance Illusion [pdf] <https://pdfs.semanticscholar.org/757b/845499a4ab5500089c288617529b4e573413.pdf> [accessed 26 April 2017].

Bruhn, M., Karlan, D. and Schoar, A. (2010) The Impact of Offering Consulting Services to Small and Medium Enterprises: Evidence from a Randomized Trial in Mexico [online], World Bank Working Papers <https://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-6508> [accessed 3 March 2020].

Chowdhury, A. (2009) Microfinance as a Poverty Reduction Tool: A Critical Assessment [online], UN DESA Working Paper 89, ST/ESA/ 2009/DWP/ 89 <https://doi.org/10.18356/e9ad576c-en> [accessed 26 April 2017].

Crépon, B., Devoto, F., Duflo, E. and Pariente, W. (2014) Estimating the Impact of Microcredit on Those Who Take it Up: Evidence from a Randomized Experiment in Morocco [online], Discussion Paper 2014-12, Institut de Recherches Economiques et Sociales <https://www.nber.org/papers/w20144.pdf> [accessed 20 May 2015].

Creswell, J.W. (2009) Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (3rd edn), Sage, Thousand Oaks, CA.

Dalglish, C.L. and Mathews, Judy H. (2009) ‘Designing self sustaining support for microenterprises in sub-Saharan Africa: a pilot’, in Global Forum 2009 Business as an Agent of World Benefit: Managing as Designing in an Era of Massive Innovation [pdf], Cleveland, OH: Western Reserve University <https://eprints.qut.edu.au/27754/1/c27754.pdf> [accessed 20 May 2017].

De Mel, S., McKenzie, D. and Woodruff, C. (2008) ‘Returns to capital in micro enterprises: evidence from a field experiment’, The Quarterly Journal of Economics 123(4): 1329–72 <https://doi.org/10.1162/qjec.2008.123.4.1329>.

Desai, J. and Tarozzi, K.J.A. (2013) On the Impact of Microcredit: Evidence from a Randomized Intervention in Rural Ethiopia [online], Barcelona GSE Working Paper Series no 741 <https://repositori.upf.edu/bitstream/handle/10230/21806/1407.pdf?sequence=1> [accessed 20 May 2017].

Do, T.Q.T. (2009) How Firm Characteristics Affect the Level of Constrain to Growth: An Empirical Analysis of Micro and Small Firms in Vietnam [online], CSE Working Paper, Universite Paris <https://halshs.archives-ouvertes.fr/halshs-00429732/document [accessed 15 June 2017].

Duflo, E., Banerjee, A., Glennerster, R. and Kinnan, C. (2013) The Miracle of Microfinance? [online], NBER Working Paper 18950 <http://www.nber.org/papers/w18950> [accessed 15 May 2017].

Duvendack, M., Palmer-Jones, R., Copestake, J.G., Hooper, L., Loke, Y. and Rao, N. (2011) What is the Evidence of the Impact of Microfinance on the Well-Being of Poor People? [pdf], London: EPPI Centre, Social Science Research Unit, Institute of Education, University of London <https://ueaeprints.uea.ac.uk/id/eprint/35466/1/Microfinance2011Duvendackreport.pdf> [accessed 18 June 2017].

Fafchamps, M., David, M., Simon, Q. and Christopher, W. (2011) When is Capital Enough to Get Female Micro Enterprise Growing? Evidence from Randomized Experiments in Ghana [online], NBER Working Paper no. 17207 <https://www.nber.org/papers/w17207.pdf> [accessed 18 June 2017].

Field, E., Pande, R., Papp, J. and Rigol, N. (2011) Debt Structure, Entrepreneurship, and Risk: Evidence from Microfinance [online] <https://pdfs.semanticscholar.org/10fc/f159009fe849e917fe87a7f3e2bfa28c980f.pdf pp 181-194> [accessed 20 April 2017].

Hashemi, S.M. and de Montesquiou, A. (2011) Reaching the Poorest: Lessons from the Graduation Model [pdf], CGAP Focus Note No.69 <https://mycircle.trickleup.org/wp-content/uploads/2016/05/2011_CGAP_Reaching_the_Poorest_Lessons_from_Graduation_Model.pdf> [accessed 20 April 2017].

Heino, H. and Pagan, J. (2001) ‘Assessing the need for microenterprise in Mexico to borrow start-up capital’, Journal of Microfinance 3(1): 131–44.

Hosmer, D.W. Jr and Lemeshow, S. (2001) Applied Logistic Regression, 2nd edn, John Wiley & Sons, New York.

Hseih Hsui-Fang and Shannon, S.E. (2005) ‘Three approaches to qualitative content analysis’, Qualitative Health Research 15(9): 1277–88 <https://doi.org/10.1177%2F1049732305276687>.

Hulme, D. and Mosley, P. (1996) Finance Against Poverty, Vol. 1, Routledge, London.

Karlan, D. and Morduch, J. (2009) Access to Finance: Ideas and Evidence Credit Market Innovations [pdf], joint paper by Financial Access Initiative and Innovations for Poverty Action <https://www.microfinancegateway.org/sites/default/files/mfg-en-paper-access-to-finance-ideas-and-evidence-credit-market-innovations-jun-2009.pdf> [accessed 11 April 2017].

Karlan, D. and Zinman, J. (2011) ‘Microcredit in theory and practice: using randomized credit scoring for impact evaluation’, Science 332(6035): 1278–84 <http://dx.doi.org/10.1126/science.1200138>.

Karnani, A. (2007) ‘Microfinance misses its mark’, Stanford Social Innovation Review 5(3): 34–40.

Kassim, M. and Hendricks, S. (2002) ‘False hope from micro-enterprise’, Agenda 17(52): 33–9 <https://dx.doi.org/10.1080/10130950.2002.9675890?journalCode=ragn20>.

Kochar, A. (1997) ‘Does lack of access to formal credit constrain agricultural production? Evidence from land tenancy market in rural India’, American Journal of Agricultural Economics 79(3): 754–63.

Kristiansen, S. (2001) ‘Promoting African pioneers in business: what makes a context conducive to small scale entrepreneurship?’ The Journal of Entrepreneurship 10(1): 43–69 <https://doi.org/10.1177%2F097135570101000103>.

Kuzilwa, J.A. (2005) ‘The role of credit for small business success: a study of the national entrepreneurship development fund in Tanzania’, Journal of Entrepreneurship 14: 131–61 <https://dx.doi.org/10.1177/097135570501400204>.

Littlefield, E., Morduch, J. and Hashemi, S. (2003) Is Microfinance an Effective Strategy to Reach the Millennium Development Goals? CGAP Focus Note 24, CGAP Online, Washington, DC <https://www.mikrofinanzwiki.de/file/570/is_mf_an_effective_strategy_to_reach_the_mdg_2003.pdf> [accessed 11 April 2017].

Masakure, O., Cranfield, J. and Henson, S. (2008) ‘The financial performance of non-farm enterprises in Ghana’, World Development 36(12): 2733–62 <https://doi.org/10.1016/j.worlddev.2007.12.005>.

McCormick, D. (1997) ‘African enterprise clusters and industrialization: theory and reality’, World Development 27(9): 1531–51.

McKenzie, D. and Woodruff, C. (2008) ‘Experimental evidence on returns to capital and access to finance in Mexico’, The World Bank Economic Review [Online] 22(3): 457–82 <http://dx.doi.org/10.1093/wber/lhn017>.

McPherson, M.A. (1996) ‘Growth of micro and small enterprises in Southern Africa’, Journal of Development Economics 48: 253–77.

Mead, D.C. and Liedholm, C. (1998) ‘The dynamics of micro and small enterprises in developing countries’, World Development 26(1): 61–74.

Morduch, J. (1999) ‘The microfinance promise’, Journal of Economic Literature XXXVII: 1569–614.

Morduch, J. (2008) Can the Moor Afford Microcredit? [pdf], New York: NYU Wagner, Financial Access Initiative <https://pdfs.semanticscholar.org/0ad5/aa61c1d992238d0573294de7ff4fe12f3e6d.pdf> [accessed 23 April 2017].

Mosley, P. and Hulme, D. (1998) ‘Microenterprise finance: is there a conflict between growth and poverty alleviation?’ World Development 26(5): 783–90.

Nichter, S. and Goldmark, L. (2009) ‘Small firm growth in developing countries’, World Development 37(1): 1453–64 <https://doi.org/10.1016/j.worlddev.2009.01.013>.

Porter, M.E. (2000) ‘Location, competition and economic development: local clusters in global economy’, Economic Development Quarterly 14(1): 7–20 <https://doi.org/10.1177%2F089124240001400105>.

Roodman, D. and Morduch, J. (2009) ‘The impact of microcredit on the poor in Bangladesh: revisiting the evidence’, The Journal of Development Economics 50(4): 583–604 <https://dx.doi.org/10.1080/00220388.2013.858122>.

Schmidt, M.C. and Kolodinsky, J.M. (2007) ‘Micro enterprise development program success: a path analysis of factors that lead to and mediate client success’, Journal of Developmental Entrepreneurship 12(1): 47–69 <https://doi.org/10.1142/S1084946707000551>.

Shaw, J. (2004) ‘Microenterprise occupation and poverty reduction in microfinance programmes: evidence from Sri Lanka’, World Development 32(7): 1247–64 <https://doi.org/10.1016/j.worlddev.2004.01.009>.

Sinha, P. (2003) ‘Women entrepreneurship in the north east India: motivation, social support and constraints’, Indian Journal of Industrial Relations 38(4): 425–43.

Spears, D. (2009) Dosas by Dozens: Theory and Evidence of Present Bias in Micro Entrepreneurs [pdf], Working Paper series No.27, IFMR, Centre for Microfinance <http://www.ifmrlead.org/wp-content/uploads/2015/OWC/27_spears_dosasbydozen.pdf> [accessed 2 May 2017].

Tseng, C.C. (2012) ‘Linking entrepreneurial infrastructures and new business development: entrepreneurship development in Taiwan’, The Journal of Entrepreneurship 21(1): 117–32 <https://dx.doi.org/10.1177/097135571102100105>.

Adams, S. (2010) ‘The impact of microfinance on maize farmers in Nkoranza (Brong Ahafo Region of Ghana)’, Journal of Management Research 2(2): E7 [online] <https://pdfs.semanticscholar.org/4367/677624b14a619b98dc9dbbf917aee47a5a68.pdf> [accessed 12 June 2017].

Asian Development Bank (ADB) (1997) Microenterprise Development: Not by Credit Alone, Manila: Asian Development Bank.

Attanasio, O., Augsburg, B., de Haas, R., Fitzsimons, E. and Harmgart, H. (2014) Group Lending or Individual Lending? Evidence from a Randomized Field Experiment in Mongolia [pdf], WZB Discussion Paper, SP II 2014–3, Wissenschaftszentrum Berlin für Sozialforschung (WZB), Berlin <https://www.econstor.eu/bitstream/10419/93060/1/779360893.pdf> [accessed 7 April 2020].

Augsburg, B., de Haas, R., Harmgart, H. and Meghir, C. (2012) Microfinance, Poverty and Education [online], IFS Working Papers No. W12/15 <http://dx.doi.org/10.1920/wp.ifs.2012.1215> [accessed 20 July 2017].

Banerjee, A., Duflo, E., Glennerster, R. and Kinnan, C. (2013) Miracle of Microfinance [pdf], National Bureau Of Economic Research, Working Paper 18950 <https://www.nber.org/papers/w18950.pdf> [accessed 18 June 2017].

Bateman, M. and Chang, H.J. (2010) Microfinance Illusion [pdf] <https://pdfs.semanticscholar.org/757b/845499a4ab5500089c288617529b4e573413.pdf> [accessed 26 April 2017].

Bruhn, M., Karlan, D. and Schoar, A. (2010) The Impact of Offering Consulting Services to Small and Medium Enterprises: Evidence from a Randomized Trial in Mexico [online], World Bank Working Papers <https://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-6508> [accessed 3 March 2020].

Chowdhury, A. (2009) Microfinance as a Poverty Reduction Tool: A Critical Assessment [online], UN DESA Working Paper 89, ST/ESA/ 2009/DWP/ 89 <https://doi.org/10.18356/e9ad576c-en> [accessed 26 April 2017].

Crépon, B., Devoto, F., Duflo, E. and Pariente, W. (2014) Estimating the Impact of Microcredit on Those Who Take it Up: Evidence from a Randomized Experiment in Morocco [online], Discussion Paper 2014-12, Institut de Recherches Economiques et Sociales <https://www.nber.org/papers/w20144.pdf> [accessed 20 May 2015].

Creswell, J.W. (2009) Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (3rd edn), Sage, Thousand Oaks, CA.

Dalglish, C.L. and Mathews, Judy H. (2009) ‘Designing self sustaining support for microenterprises in sub-Saharan Africa: a pilot’, in Global Forum 2009 Business as an Agent of World Benefit: Managing as Designing in an Era of Massive Innovation [pdf], Cleveland, OH: Western Reserve University <https://eprints.qut.edu.au/27754/1/c27754.pdf> [accessed 20 May 2017].

De Mel, S., McKenzie, D. and Woodruff, C. (2008) ‘Returns to capital in micro enterprises: evidence from a field experiment’, The Quarterly Journal of Economics 123(4): 1329–72 <https://doi.org/10.1162/qjec.2008.123.4.1329>.

Desai, J. and Tarozzi, K.J.A. (2013) On the Impact of Microcredit: Evidence from a Randomized Intervention in Rural Ethiopia [online], Barcelona GSE Working Paper Series no 741 <https://repositori.upf.edu/bitstream/handle/10230/21806/1407.pdf?sequence=1> [accessed 20 May 2017].

Do, T.Q.T. (2009) How Firm Characteristics Affect the Level of Constrain to Growth: An Empirical Analysis of Micro and Small Firms in Vietnam [online], CSE Working Paper, Universite Paris <https://halshs.archives-ouvertes.fr/halshs-00429732/document [accessed 15 June 2017].

Duflo, E., Banerjee, A., Glennerster, R. and Kinnan, C. (2013) The Miracle of Microfinance? [online], NBER Working Paper 18950 <http://www.nber.org/papers/w18950> [accessed 15 May 2017].

Duvendack, M., Palmer-Jones, R., Copestake, J.G., Hooper, L., Loke, Y. and Rao, N. (2011) What is the Evidence of the Impact of Microfinance on the Well-Being of Poor People? [pdf], London: EPPI Centre, Social Science Research Unit, Institute of Education, University of London <https://ueaeprints.uea.ac.uk/id/eprint/35466/1/Microfinance2011Duvendackreport.pdf> [accessed 18 June 2017].

Fafchamps, M., David, M., Simon, Q. and Christopher, W. (2011) When is Capital Enough to Get Female Micro Enterprise Growing? Evidence from Randomized Experiments in Ghana [online], NBER Working Paper no. 17207 <https://www.nber.org/papers/w17207.pdf> [accessed 18 June 2017].

Field, E., Pande, R., Papp, J. and Rigol, N. (2011) Debt Structure, Entrepreneurship, and Risk: Evidence from Microfinance [online] <https://pdfs.semanticscholar.org/10fc/f159009fe849e917fe87a7f3e2bfa28c980f.pdf pp 181-194> [accessed 20 April 2017].

Hashemi, S.M. and de Montesquiou, A. (2011) Reaching the Poorest: Lessons from the Graduation Model [pdf], CGAP Focus Note No.69 <https://mycircle.trickleup.org/wp-content/uploads/2016/05/2011_CGAP_Reaching_the_Poorest_Lessons_from_Graduation_Model.pdf> [accessed 20 April 2017].

Heino, H. and Pagan, J. (2001) ‘Assessing the need for microenterprise in Mexico to borrow start-up capital’, Journal of Microfinance 3(1): 131–44.

Hosmer, D.W. Jr and Lemeshow, S. (2001) Applied Logistic Regression, 2nd edn, John Wiley & Sons, New York.

Hseih Hsui-Fang and Shannon, S.E. (2005) ‘Three approaches to qualitative content analysis’, Qualitative Health Research 15(9): 1277–88 <https://doi.org/10.1177%2F1049732305276687>.

Hulme, D. and Mosley, P. (1996) Finance Against Poverty, Vol. 1, Routledge, London.

Karlan, D. and Morduch, J. (2009) Access to Finance: Ideas and Evidence Credit Market Innovations [pdf], joint paper by Financial Access Initiative and Innovations for Poverty Action <https://www.microfinancegateway.org/sites/default/files/mfg-en-paper-access-to-finance-ideas-and-evidence-credit-market-innovations-jun-2009.pdf> [accessed 11 April 2017].

Karlan, D. and Zinman, J. (2011) ‘Microcredit in theory and practice: using randomized credit scoring for impact evaluation’, Science 332(6035): 1278–84 <http://dx.doi.org/10.1126/science.1200138>.

Karnani, A. (2007) ‘Microfinance misses its mark’, Stanford Social Innovation Review 5(3): 34–40.

Kassim, M. and Hendricks, S. (2002) ‘False hope from micro-enterprise’, Agenda 17(52): 33–9 <https://dx.doi.org/10.1080/10130950.2002.9675890?journalCode=ragn20>.

Kochar, A. (1997) ‘Does lack of access to formal credit constrain agricultural production? Evidence from land tenancy market in rural India’, American Journal of Agricultural Economics 79(3): 754–63.

Kristiansen, S. (2001) ‘Promoting African pioneers in business: what makes a context conducive to small scale entrepreneurship?’ The Journal of Entrepreneurship 10(1): 43–69 <https://doi.org/10.1177%2F097135570101000103>.

Kuzilwa, J.A. (2005) ‘The role of credit for small business success: a study of the national entrepreneurship development fund in Tanzania’, Journal of Entrepreneurship 14: 131–61 <https://dx.doi.org/10.1177/097135570501400204>.

Littlefield, E., Morduch, J. and Hashemi, S. (2003) Is Microfinance an Effective Strategy to Reach the Millennium Development Goals? CGAP Focus Note 24, CGAP Online, Washington, DC <https://www.mikrofinanzwiki.de/file/570/is_mf_an_effective_strategy_to_reach_the_mdg_2003.pdf> [accessed 11 April 2017].

Masakure, O., Cranfield, J. and Henson, S. (2008) ‘The financial performance of non-farm enterprises in Ghana’, World Development 36(12): 2733–62 <https://doi.org/10.1016/j.worlddev.2007.12.005>.

McCormick, D. (1997) ‘African enterprise clusters and industrialization: theory and reality’, World Development 27(9): 1531–51.

McKenzie, D. and Woodruff, C. (2008) ‘Experimental evidence on returns to capital and access to finance in Mexico’, The World Bank Economic Review [Online] 22(3): 457–82 <http://dx.doi.org/10.1093/wber/lhn017>.

McPherson, M.A. (1996) ‘Growth of micro and small enterprises in Southern Africa’, Journal of Development Economics 48: 253–77.

Mead, D.C. and Liedholm, C. (1998) ‘The dynamics of micro and small enterprises in developing countries’, World Development 26(1): 61–74.

Morduch, J. (1999) ‘The microfinance promise’, Journal of Economic Literature XXXVII: 1569–614.

Morduch, J. (2008) Can the Moor Afford Microcredit? [pdf], New York: NYU Wagner, Financial Access Initiative <https://pdfs.semanticscholar.org/0ad5/aa61c1d992238d0573294de7ff4fe12f3e6d.pdf> [accessed 23 April 2017].

Mosley, P. and Hulme, D. (1998) ‘Microenterprise finance: is there a conflict between growth and poverty alleviation?’ World Development 26(5): 783–90.

Nichter, S. and Goldmark, L. (2009) ‘Small firm growth in developing countries’, World Development 37(1): 1453–64 <https://doi.org/10.1016/j.worlddev.2009.01.013>.

Porter, M.E. (2000) ‘Location, competition and economic development: local clusters in global economy’, Economic Development Quarterly 14(1): 7–20 <https://doi.org/10.1177%2F089124240001400105>.

Roodman, D. and Morduch, J. (2009) ‘The impact of microcredit on the poor in Bangladesh: revisiting the evidence’, The Journal of Development Economics 50(4): 583–604 <https://dx.doi.org/10.1080/00220388.2013.858122>.

Schmidt, M.C. and Kolodinsky, J.M. (2007) ‘Micro enterprise development program success: a path analysis of factors that lead to and mediate client success’, Journal of Developmental Entrepreneurship 12(1): 47–69 <https://doi.org/10.1142/S1084946707000551>.

Shaw, J. (2004) ‘Microenterprise occupation and poverty reduction in microfinance programmes: evidence from Sri Lanka’, World Development 32(7): 1247–64 <https://doi.org/10.1016/j.worlddev.2004.01.009>.

Sinha, P. (2003) ‘Women entrepreneurship in the north east India: motivation, social support and constraints’, Indian Journal of Industrial Relations 38(4): 425–43.

Spears, D. (2009) Dosas by Dozens: Theory and Evidence of Present Bias in Micro Entrepreneurs [pdf], Working Paper series No.27, IFMR, Centre for Microfinance <http://www.ifmrlead.org/wp-content/uploads/2015/OWC/27_spears_dosasbydozen.pdf> [accessed 2 May 2017].

Tseng, C.C. (2012) ‘Linking entrepreneurial infrastructures and new business development: entrepreneurship development in Taiwan’, The Journal of Entrepreneurship 21(1): 117–32 <https://dx.doi.org/10.1177/097135571102100105>.