n AfricaGrowth Agenda - The right private equity market for African Economies

Volume 2009, Issue 7
  • ISSN : 1811-5187


The choicest commodity for an entrepreneur anywhere in the world is access to external finance, be it in the form of debt or equity contract. Entrepreneurship, which by definition is the pursuit of production opportunities beyond the resources the venturing individual currently owns or controls, needs external finance as its life-line. This life-line is particularly important because entrepreneurs are a major source of new jobs and economic growth in both developed and developing economies (Blau, 1987; Wennekers and Thurik, 1999; Schramm, 2006; Acs & Szerb, 2007 and Klapper et al, 2007). It is therefore not surprising that countries which are successful at enhancing the availability of external funds to current and potential entrepreneurs are also successful at creating jobs and growing their economy. The mechanism for enhancing the availability of finance to entrepreneurs can take the form of strengthening the banking industry, setting up government backed credit support programs, and creating private equity markets.

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