Proceedings of the International Conference on Sustainable Business and Entrepreneurship (ICSBE 2025)

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The Interplay between Financial Behavior, Risk Tolerance, Performance, and Poverty: Evidence from Micro-Entrepreneurs in Ghana

Authors
Prince Koranteng Kumi1, *, Daniel Osabutey1, Osbourn Osabutey-Abbey2
1Accounting and Finance Department, Accra Technical University, Accra, Ghana
2University of Derby Business School, Derby, UK
*Corresponding author. Email: pkkumi@atu.edu.gh
Corresponding Author
Prince Koranteng Kumi
Available Online 26 December 2025.
DOI
10.2991/978-94-6463-930-8_26How to use a DOI?
Keywords
Financial behavior; financial performance; financial risk tolerance; poverty reduction; Ghana
Abstract

This study examines how financial behavior and risk tolerance of microenterprise owner-managers affect their business performance and poverty levels. Despite informal microenterprises being critical employment sources for the poor, their typically poor performance remains inadequately explained. Using Structural Equation Modeling with data from 550 informal micro-entrepreneurs in Ghana, we reveal three key findings: First, good financial behavior directly reduces poverty levels (β = -0.434, p < 0.001), demonstrating that sound financial practices significantly improve wellbeing. Second, financial behavior indirectly reduces poverty through improved business performance (indirect β = -0.248, p < 0.001), highlighting how proper financial management translates into better outcomes. Third, financial risk tolerance moderates the relationship between financial behavior and business performance (β = 0.346, p < 0.001), implying higher risk tolerance amplifies the positive effects of good financial behaviors. These findings contribute to behavioral finance theory and Resource-based theory, emphasizing that both financial behaviors and individual risk attitudes must be considered when designing interventions for millions of informal micro-entrepreneurs across sub-Saharan Africa.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Conference on Sustainable Business and Entrepreneurship (ICSBE 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
26 December 2025
ISBN
978-94-6463-930-8
ISSN
2352-5428
DOI
10.2991/978-94-6463-930-8_26How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Prince Koranteng Kumi
AU  - Daniel Osabutey
AU  - Osbourn Osabutey-Abbey
PY  - 2025
DA  - 2025/12/26
TI  - The Interplay between Financial Behavior, Risk Tolerance, Performance, and Poverty: Evidence from Micro-Entrepreneurs in Ghana
BT  - Proceedings of the International Conference on Sustainable Business and Entrepreneurship (ICSBE 2025)
PB  - Atlantis Press
SP  - 392
EP  - 413
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-930-8_26
DO  - 10.2991/978-94-6463-930-8_26
ID  - Kumi2025
ER  -