Youth Entrepreneurship, Credit Access and Post-Disaster Business Recovery: Evidence From Informal Food Enterprises in Ghana

Abstract

This study investigates how access to finance (credit access) influences business recovery and entrepreneurial performance among youth-led informal food enterprises in Ghana, with implications for financial inclusion, entrepreneurial ability and post-crisis business resilience in developing economies. Using cross-sectional data from 136 enterprises across three regions, we apply a probit model to identify determinants of youth entrepreneurs’ access to credit and an endogenous treatment regression to assess its impact on firm outcomes. Results show that membership in business associations significantly increases the likelihood of obtaining credit, while mentorship and social media usage are associated with lower access. Importantly, enterprises receiving credit support experience substantial gains in entrepreneurial performance, with average profit increases of GHS 11586.44 (p < 0.001) and employment growth of 3.84 workers (p < 0.001), indicating stronger post-disaster recovery and business resilience. Additional practices, such as financial record-keeping and strategic social media use, further enhance profits and employment. The findings highlight the role of targeted youth-focused credit interventions, financial management training and digital literacy in supporting youth entrepreneurship and fostering business resilience in informal economies.