Advancing the financial performance of small businesses in ghana: does microfinancing matter?
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Date
2023
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KNUST
Abstract
The study examines the effect of microfinance products or services on the performance of small businesses in Ghana. Specifically, the study uses quantitative explanatory research to examine the nexus of MFI products or services (microcredit, savings, education, and insurance) including control variables such as gender, managerial competencies, owner’s age, nature of business or industry, business size) on the performance of small businesses in Ghana. The study uses descriptive statistics (mean, standard deviation, minimum, and maximum scores) and inferential statistics such as Pearson Correlation Analysis, and multiple linear regression on a sample size of 225 responses to help achieve the study’s objectives. The study finds that microloans affect sales growth (or levels) but not profit levels. Also, micro-savings affect the profit levels but not the sales growth and the insurance from MFIs affects the profitability of small businesses in Accra, however, it has no significant influence on the sales growth of businesses. Education provided by MFIs, on the other hand, increases both the sales and profit levels of small businesses in Ghana. The study recommends that for the profit levels of small businesses to be increased, nascent and prospective entrepreneurs need to focus on MFI products or services such as savings, insurance, and education (seminars or training from MFIs). Also, MFIs should increase the insurance packages to business owners to trust and have some assurance of cash in case of any operative or natural disaster. Moreover, MFIs should continue to offer education to small businesses consistently geared towards the performance of small businesses. Finally, MFIs and government agencies such as Microfinance and Small Loans Centre and National Board for Small Scale Industries should increase loan facilities including the duration of the loan, and the loan repayment should be spread over long periods.
Description
A thesis submitted to department of accounting and finance, kwame nkrumah university of science and technology, kumasi in partial fulfillment of the requirement for the degree of master of science (accounting and finance)