Relationship between Determinants of Financial Assistance and Credit Accessibility of Small and Medium-Enterprises (SME’s): A Case Study of SME’s in Takoradi Metropolis in the Western Region of Ghana
In Ghana and
other countries’ economies, small and medium
scale enterprises (SME’s) play a
principal role that significantly impacts economic stability. SMEs contribute prominently
to the economy by creating more noteworthy work openings, making higher creation
volumes, growing conveys and introducing progression and business capacities. This
study used a sample of 336 SMEs out of 500 SME’s located in the Western Region (Takoradi Metropolis).
These SMEs data were obtained using questionnaire in which its instrument was validated
by experts in the field of finance and was administered to the respondents. Primary
data were obtained to assess the determinants of financial assistance available
to SME’s in Ghana
(Takoradi Metropolis). Strategies were used to obtain the outcome of the result,
such as ANOVA (analysis of
variance), regression analysis, and descriptive statistics to analyze the relationship
between the determinants of financial assistance and SMEs’ credit accessibility.
It showed that firm’s age, size, performance, and collateral security all have a
positive impact that determines financial assistance to the credit accessibility
of SMEs in Takoradi Metropolis. The research discovers enough information that confirms
critical factors that push the credit accessibility available to SME’s. It can be recommended that
the availability of credit opportunities to SME’s in the form of loans should be given a maximum consideration.
References
[1]
Abor, J., & Quartey, P. (2010). Issues in SME Development in Ghana and South Africa. International Research Journal of Finance and Economics, 39, 215-228.
[2]
Adomako-Ansah, F. K. (2012). Determinants of Small and Medium Enterprise (SME) Financing by Financial Institutions in Ghana. Doctoral Dissertation.
[3]
Ayyagari, M., Beck, T., & Demirguc-Kunt, A. (2007). Small and Medium Enterprises across the Globe. Small Business Economics, 29, 415-434.
https://doi.org/10.1007/s11187-006-9002-5
[4]
Baah-Nuakoh, A. (2003). Studies on the Ghanaian Economy: Environment, Informal Sector, and Labour Markets (Vol. 2). Woeli Pub Serv.
[5]
Bartlett, J. E., Kotrlik, J. W., & Higgins, C. C. (2001). Organizational Research: Determining Appropriate Sample Size in Survey Research. Information Technology, Learning, and Performance Journal, 19, 43-50. https://doi.org/10.5032/jae.2002.03001
[6]
Beck, T., & Cull, R. (2014). SME Finance in Africa. Journal of African Economies, 23, 583-613. https://doi.org/10.1093/jae/eju016
[7]
Beck, T., & Demirguc-Kunt, A. (2006). Small and Medium-Size Enterprises: Access to Finance as a Growth Constraint. Journal of Banking & Finance, 30, 2931-2943.
https://doi.org/10.1016/j.jbankfin.2006.05.009
[8]
Bolton, J. E. (1971). Report of the Committee of Inquiry on Small Firms. London: HMSO.
[9]
Ebrahim, N. A., Rashid, S. H. A., Ahmed, S., & Taha, Z. (2011). The Effectiveness of Virtual R&D Teams in SMEs: Experiences of Malaysian SMEs.
[10]
Kessy, S., & Temu, S. S. (2010). The Impact of Training on Performance of Micro and Small Enterprises Served by Microfinance Institutions in Tanzania. Research Journal of Business Management, 4, 103-111. https://doi.org/10.3923/rjbm.2010.103.111
[11]
Kumah, R. (2011). Determinants of Access to Bank Credit in Ghana: The Case of Small and Medium-Sized Enterprises in the Accra Metropolis. Unpublished Thesis (MBA), Kumasi: Kwame Nkrumah University of Science and Technology.
[12]
Kushnir, K. (2010). A Universal Definition of Small Enterprise: A Procrustean Bed for SMEs?
http://blogs.worldbank.org/psd/a-universal-definition-of-small-enterprise-a-procrustean-bed-for-smes
[13]
Kuzilwa, J. (2005). The Role of Credit for Small Business Success. Journal of Entrepreneurship, 14, 131-161. https://doi.org/10.1177/097135570501400204
[14]
Nkuah, J. K., Tanyeh, J. P., & Gaeten, K. (2013). Financing Small and Medium Enterprises (SMEs) in Ghana: Challenges and Determinants in Accessing Bank Credit. International Journal of Research in Social Sciences, 2, 12-25.
[15]
Osei-Assibey, E. (2014). The Rural Financial System in Ghana: What Determines Access and Sources of Finance for Rural Non-Farm Enterprises? In Readings on Key Economic Issues in Ghana. Social Science Series, 4. Legon: Department of Economics, University of Ghana.
[16]
Pandula, G. (2011). An Empirical Investigation of Small and Medium Enterprises’ Access to Bank Finance: The Case of an Emerging Economy. Proceedings of ASBBS Annual Conference, Vol. 18, 18.
[17]
Schaper, M., Volery, T., Weber, P., & Lewis, K. (2010). Entrepreneurship and Small Business (3rd Asia-Pacific ed.). Hoboken, NJ: John Wiley & Sons.
[18]
Stiglitz, J., & Weiss, A. (1981). Credit Rationing in Market with Imperfect Information. American Economic Review, 71, 912-927.
[19]
Wanjiru, R. (2000). Factors That Influence Productivity of Credit Officers in Microfinance: Unpublished MBA Project. Nairobi: University of Nairobi.
[20]
World Bank (2013). Global Financial Development Report 2013: Rethinking the Role of the State in Finance. Washington DC: World Bank.
https://doi.org/10.1596/9780821399859
[21]
Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2003). Research Methods. Health Economics Research Method, 2.
