Capital and credit sources and household non-farm income in Ghana

Abstract

This paper examines the effects of the various sources of capital and credit available for financing non-farm enterprises in Ghana. A maximization of the household production function yields linear equations for estimating the key parameters of interest. Capital from bank, family, NGOs and money lenders significantly influence non-farm income. In terms of business expansion, credit from bank, cooperatives and family/friends are very important. Regional differences also appear to be significant as well as the ecological zones. Gender differences in capital and credit sources affect income of non-farm enterprises.