Improving Challenges of Impact Measurement of Catalytic Capital Investments towards Developing Sustainable Financing for Small and Medium Enterprises (SMEs) in Ghana

Abstract

Abstract

Purpose: This study therefore aims to explore the major challenges hindering the measurement of impact from catalytic capital investment in Ghana. The objectives are to examine the major challenges affecting the measurement of impact from catalytic capital investment in Ghana and to identify innovative initiatives to improve its impact measurement. Design/ Methodology/ Approach: A qualitative study was conducted, using semi-structured interviews with twelve (12) impact investors and impact fund managers selected through purposive sampling. Thematic analysis was used for data analysis. Research Limitation: The study was contextualised within impact investors and fund managers in Ghana, which will limit the generalisability of the findings globally. Findings: The key challenges identified in impact measurement were data collection issues, fragmented impact tools, inadequate capacity, and financial constraints. Innovative initiatives suggested by the study included setting up sector-wise standardised, contextualised impact tools; capacity building; communicating good impact stories; the need for a local impact expert; strong data governance; and a sustainable impact plan. Practical Implication: Implementing the innovative initiatives identified in the study will help make measuring the impact of catalytic capital investments more effective, providing credible, evidence-based results to attract more sustainable financing for SMEs in Ghana. Social Implication: With more sustainable financing through these initiatives, job creation by SMEs will expand, helping to reduce poverty. Improving impact measurement will encourage these SMEs to adopt sustainable practices in their operations, benefiting both society and the environment. Originality / Value: The study makes a significant contribution by developing a conceptual framework for how improving impact measurement of catalytic capital investment can attract more sustainable financing for SMEs in Ghana. In addition to the conceptual framework, a developed framework for improving impact measurement from catalytic capital investment was identified in the study.