Financing Bricolage in Crisis: A Behavioral Multi-Criteria Decision Framework for Ranking Alternative Funding Pathways in Sub-Saharan African SMEs
Author(s)
Kong Yusheng , Dominic Achari , Ernest Kay Bakpa , Seth Boahen , Martin Kwesi Appah ,
Download Full PDF Pages: 01-20 | Views: 9 | Downloads: 3 | DOI:
Abstract
Small and medium-sized enterprises in Sub-Saharan Africa face severe financing constraints, exacerbated by Ghana's banking crisis from 2017 to 2019, which eroded trust and deepened credit rationing. While entrepreneurs turn to alternative financing, behavioral finance offers limited insight into how psychological and social factors shape their evaluation and combination of options in crises. This study contributes to corporate finance and behavioral finance theory by developing a behavioral Financing Bricolage Under Rejection framework to explain how entrepreneurs creatively recombine funding sources when formal finance fails. Using a mixed-methods design, Grounded Theory identifies six behaviorally-grounded decision criteria, validated through a survey of 412 SMEs and integrated into an entropy-weighted TOPSIS model. Results show digital alternatives, particularly peer-to-peer lending and crowdfunding, outrank equity-based mechanisms due to speed, accessibility, and peer-mediated information flows. Adoption Velocity and Perceived Barriers emerge as key criteria, highlighting liquidity urgency and loss-avoidance in crisis-driven decision-making. The study advances corporate finance theory by modeling SME capital structure decisions under institutional uncertainty and offers practical insights for financial institutions and fintech developers. It advances behavioral finance by conceptualizing Resource Bricolage Capacity as a strategic capability and introduces a decolonized MCDM framework for African contexts. Policy implications highlight the need to strengthen digital lending ecosystems, improve regulatory clarity, and design crisis-responsive financing products to enhance SME financing resilience.
Keywords
Small and medium-sized enterprises; Behavioral Finance; Decision-Making; Grounded Theory; Financing Bricolage; entropy-weighted TOPSIS; Sub-Saharan Africa
References
Abor, J., & Quartey, P. (2010). Issues in SME Development in Ghana and South Africa. In International Research Journal of Finance and Economics. http://www.eurojournals.com/finance.htm
Adomako, S., Amankwah-Amoah, J., Tarba, S. Y., & Khan, Z. (2021). Perceived corruption, business process digitization, and SMEs’ degree of internationalization in sub-Saharan Africa. Journal of Business Research, 123, 196–207. https://doi.org/10.1016/j.jbusres.2020.09.065
Agyapong, D., & Attram, A. B. (2019). Effect of owner-manager’s financial literacy on the performance of SMEs in the Cape Coast Metropolis in Ghana. Journal of Global Entrepreneurship Research, 9(1), 67. https://doi.org/10.1186/s40497-019-0191-1
Akerlof, G. A. (1970). The Market for “Lemons”: Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics, 84(3), 488. https://doi.org/10.2307/1879431
Aldamen, H., Duncan, K., Kelly, S., & McNamara, R. (2020). Corporate governance and family firm performance during the Global Financial Crisis. Accounting & Finance, 60(2), 1673–1701. https://doi.org/10.1111/acfi.12508
Ali-Yrkkö, J., Pajarinen, M., & Ylhäinen, I. (2019). Business Angel Investment, Public Innovation Funding and Firm Growth. Business Finland, 1–47. https://pub.etla.fi/ETLA-Raportit-Reports-97.pdf
Allen, F., Demirguc-Kunt, A., Klapper, L., & Martinez Peria, M. S. (2016). The foundations of financial inclusion: Understanding ownership and use of formal accounts. Journal of Financial Intermediation, 27, 1–30. https://doi.org/10.1016/J.JFI.2015.12.003
Amoako, I. O., Akwei, C., & Damoah, I. (2021). We Know Their House, Family, and Workplace: Trust in entrepreneurs’ trade credit relationships in weak institutions. Journal of Small Business Management, 59(6), 1097–1126. https://doi.org/10.1111/jsbm.12488
Anarfo, E. B., Abor, J. Y., & osei, K. A. (2020). Financial regulation and financial inclusion in Sub-Saharan Africa: Does financial stability play a moderating role? Research in International Business and Finance, 51. https://doi.org/10.1016/j.ribaf.2019.101070
Baker, M., & Wurgler, J. (2013). Behavioral Corporate Finance: An Updated Survey. Handbook of the Economics of Finance, 2(PA), 357–424. https://doi.org/10.1016/B978-0-44-453594-8.00005-7
Baker, T., & Nelson, R. E. (2005). Creating Something from Nothing: Resource Construction through Entrepreneurial Bricolage. Administrative Science Quarterly, 50(3), 329–366. https://doi.org/10.2189/asqu.2005.50.3.329
Balyuk, T., & Davydenko, S. (2024). Reintermediation in FinTech: Evidence from Online Lending. Journal of Financial and Quantitative Analysis, 59(5), 1997–2037. https://doi.org/10.1017/S0022109023000789
Bandura, A. (1977). Social Learning Theory. Prentice-Hall.
Banerjee, A. V. (1992). A Simple Model of Herd Behavior. The Quarterly Journal of Economics, 107(3), 797–817. https://doi.org/10.2307/2118364
Bánhidi, Z., & Dobos, I. (2024). Sensitivity of TOPSIS ranks to data normalization and objective weights on the example of digital development. Central European Journal of Operations Research, 32(1), 29–44. https://doi.org/10.1007/s10100-023-00876-y
Bank of Ghana (BOG). (2023). Annual Report and Financial Statements. https://www.bog.gov.gh/wp-content/uploads/2024/05/Bank-of-Ghana-2023-Annual-Report-and-Financial-Statements.pdf
Beck, T., & Cull, R. (2014). SME finance in Africa. Journal of African Economies, 23(5), 583–613. https://doi.org/10.1093/jae/eju016
Bhattacharyya, A., Rahman, M. L., & Wright, S. (2023). Improving small and medium‐size enterprise performance: Does working capital management enhance the effectiveness of financial inclusion? Accounting & Finance, 63(4), 3943–3969. https://doi.org/10.1111/acfi.13081
Bougheas, S., Lim, H., Mateut, S., Mizen, P., & Yalcin, C. (2018). Foreign currency borrowing, exports and firm performance: evidence from a currency crisis. The European Journal of Finance, 24(17), 1649–1671. https://doi.org/10.1080/1351847X.2017.1421246
Bruton, G. D., Ketchen, D. J., & Ireland, R. D. (2013). Entrepreneurship as a solution to poverty. Journal of Business Venturing, 28(6), 683–689. https://doi.org/10.1016/j.jbusvent.2013.05.002
Bruton, G. D., Zahra, S. A., & Cai, L. (2018). Examining Entrepreneurship Through Indigenous Lenses. Entrepreneurship Theory and Practice, 42(3), 351–361. https://doi.org/10.1177/1042258717741129
Burns, S. (2015). Mobile Money and Financial Development: The Case of M-PESA in Kenya. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2688585
Campbell, J. M., Line, N., Runyan, R. C., & Swinney, J. L. (2010). The Moderating Effect of Family-Ownership on Firm Performance: An Examination of Entrepreneurial Orientation and Social Capital. Journal of Small Business Strategy (Archive Only), 21(2), 27–46.
Černevičienė, J., & Kabašinskas, A. (2022). Review of Multi-Criteria Decision-Making Methods in Finance Using Explainable Artificial Intelligence. Frontiers in Artificial Intelligence, 5. https://doi.org/10.3389/frai.2022.827584
Charmaz, K. (2014). Constructing grounded theory (2nd ed.). SAGE Open, 1–746. https://afshinsafaee.ir/wp-content/uploads/2022/10/Introducing-qualitative-methods-Charmaz-Kathy-Constructing-grounded-theory-2014-SAGE-Publications-libgen.li_.pdf.
Claessens, S., Frost, J., Turner, G., & Zhu, F. (2018). Fintech credit markets around the world: size, drivers and policy issues. BIS Quarterly Review September.
Creswell, J. W. ., & Plano Clark, V. L. . (2018). Designing and conducting mixed methods research. SAGE.
DeAngelo, H. (2021). Corporate financial policy: What really matters? Journal of Corporate Finance, 68, 101925. https://doi.org/10.1016/J.JCORPFIN.2021.101925
Desa, G., & Basu, S. (2013). Optimization or Bricolage? Overcoming Resource Constraints in Global Social Entrepreneurship. Strategic Entrepreneurship Journal, 7(1), 26–49. https://doi.org/10.1002/sej.1150
Flaminiano, J. P. C. (2024). Entrepreneurial bricolage: A key to innovation for SMEs in a developing economy. Small Business International Review, 8(1), e645. https://doi.org/10.26784/sbir.v8i1.645
Govindan, K., & Jepsen, M. B. (2016). ELECTRE: A comprehensive literature review on methodologies and applications. European Journal of Operational Research, 250(1), 1–29. https://doi.org/10.1016/j.ejor.2015.07.019
Gowda, M. V. R. (1999). Heuristics, Biases, and the Regulation of Risk. Policy Sciences, 32(1), 59–78. http://www.jstor.org/stable/4532449
Guo, H., & Xiao, Z. (2021). Effect of severe litigation and bank connection on bank financing in China. Accounting & Finance, 61(3), 3883–3914. https://doi.org/10.1111/acfi.12719
Herrmann, A. M., Storz, C., & Held, L. (2022). Whom do nascent ventures search for? Resource scarcity and linkage formation activities during new product development processes. Small Business Economics, 58(1), 475–496. https://doi.org/10.1007/s11187-020-00426-9
Hwang, C.-L., & Yoon, K. (1981). Methods for Multiple Attribute Decision Making (pp. 58–191). https://doi.org/10.1007/978-3-642-48318-9_3
Iyer, R., Khwaja, A. I., Luttmer, E. F. P., & Shue, K. (2016). Screening Peers Softly: Inferring the Quality of Small Borrowers. Management Science, 62(6), 1554–1577. https://doi.org/10.1287/mnsc.2015.2181
Jeník, I., Flaming, M., & Salman, A. (2020). Inclusive Digital Banking: Emerging Markets Case Studies. https://www.cgap.org/sites/default/files/publications/2020_10_Working_Paper_Inclusive_Digital_Banking.pdf
Jenik, I., Lyman, T., & Nava, A. (2017). Crowdfunding and Financial Inclusion. https://www.cgap.org/sites/default/files/Working-Paper-Crowdfunding-and-Financial-Inclusion-Mar-2017.pdf
Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263. https://doi.org/10.2307/1914185
Linna, P. (2017). Innovating by “making do with what is at hand”: Creating opportunities in low-income markets [Publication series Doctoral dissertation 70/2017, Aalto University]. http://urn.fi/URN:ISBN:978-952-60-7385-9
Liu, J., Liu, A. W., Li, X., Li, H., Luo, W., & Chen, W. (2024). Evaluating the metropolitan public health preparedness for pandemics using entropy-TOPSIS-IF. Frontiers in Public Health, 12. https://doi.org/10.3389/fpubh.2024.1339611
Mahalanobis, P. C. (1936). On the Generalized Distance in Statistics. . Proceedings of the National Institute of Science of India, 2, 49–55.
Mala, R., & Chand, P. (2011). Effect of the global financial crisis on accounting convergence. Accounting & Finance, 52(1), 21–46. https://doi.org/10.1111/j.1467-629X.2011.00418.x
Mbiti, I., Weil, D. N., Dinkelman, T., Driscoll, J., Eijkman, F., Habyarimana, J., Mwaura, S., Ndulu, B., Vaughn, P., & Yang, D. (2011). Mobile Banking: The Impact of M-PESA in Kenya. http://www.nber.org/papers/w17129
Millikan, M. (1938). The Liquidity-Preference Theory of Interest. The American Economic Review, 28(2), 247–260. http://www.jstor.org/stable/1806751
North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge University Press. https://doi.org/10.1017/CBO9780511808678
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329–340. https://doi.org/10.1016/J.BIR.2017.12.003
Rogers, E. M. (2003). Diffusion of innovations (5th ed.). Free Press.
Sanga, B., & Aziakpono, M. (2024). FinTech developments and their heterogeneous effect on digital finance for SMEs and entrepreneurship: evidence from 47 African countries. Journal of Entrepreneurship in Emerging Economies, 17(7), 127–155. https://doi.org/10.1108/JEEE-09-2023-0379
Shannon, C. E. (1948). A Mathematical Theory of Communication. Bell System Technical Journal, 27(3), 379–423. https://doi.org/10.1002/J.1538-7305.1948.TB01338.X
Shefrin, H. (2001). BEHAVIORAL CORPORATE FINANCE. Journal of Applied Corporate Finance, 14(3), 113–126. https://doi.org/10.1111/j.1745-6622.2001.tb00443.x
Simon, H. A. (1972). Theories of bounded rationality. In C. B. McGuire and Roy Radner (eds), Decisions and Organization (pp. 1–16). North-Holland Publishing Company.
Spence, M. (1973). Job Market Signaling. The Quarterly Journal of Economics, 87(3), 355. https://doi.org/10.2307/1882010
Stiglitz, J. E., & Weiss, A. (1981). Credit Rationing in Markets with Imperfect Information. The American Economic Review, 71(3), 393–410. http://www.jstor.org/stable/1802787
Tantawy, A. A., Amankwah‐Amoah, J., & Puthusserry, P. (2025). Institutional voids and new venture performance: The moderating role of founders’ political ties. European Management Review, 22(2), 334–351. https://doi.org/10.1111/emre.12644
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic Capabilities and Strategic Management. Strategic Management Journal, 18(7), 509–533. http://www.jstor.org/stable/3088148
Thaler, R. H. (2015). Misbehaving: The making of behavioral economics. In Misbehaving: The making of behavioral economics. W. W. Norton & Company.
Triantaphyllou, E., & Sánchez, A. (1997). A sensitivity analysis approach for some deterministic multi-criteria decision-making methods. Decision Sciences, 28(1), 151–194. https://doi.org/10.1111/J.1540-5915.1997.TB01306.X
Turner, R. J. (2007). Diffusion of Innovations. In M. R. Everett (Ed.), Free Press, (2003) (5th ed., Vol. 14, Number 6, p. 776). Journal of Minimally Invasive Gynecology. https://doi.org/10.1016/j.jmig.2007.07.001
World Bank. (2022). World Development Report 2022: Finance for an Equitable Recovery (Vols. 1 and 2). The World Bank Group. https://doi.org/10.1596/978-1-4648-1730-4
Yang, L., & Zhou, Q. (2021). Leverage constraints and corporate financing decisions. Accounting & Finance, 61(4), 5199–5230. https://doi.org/10.1111/acfi.12754
Yeboah, M. A. (2015). Determinants of SME Growth: An Empirical Perspective of SMES in the Cape Coast Metropolis, Ghana. The Journal of Business in Developing Nations, 14, 1–31.
Zopounidis, C., & Doumpos, M. (2002). Multi‐criteria decision aid in financial decision making: methodologies and literature review. Journal of Multi-Criteria Decision Analysis, 11(4–5), 167–186. https://doi.org/10.1002/mcda.333
Cite this Article: