Accessibility, utilization and loan repayment performance by small and medium scale enterprises (smes) in suame municipal.
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Date
2023
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KNUST
Abstract
The study assesses the accessibility, utilization and repayment of loans by SMEs in Suame Municipality. Data obtained from the field was analyzed based on the specific objectives that were to assess the access to credit by SMEs, examine the utilization of credits obtained by SMEs, assess the determinants of loan utilization and determine loan repayment performance by SMEs in Suame Municipality. The point biserial and chi squared tests were used to measure and evaluate the relationships between these determinants and whether the loan was used for its purpose of collection. Both the direction and degree of relationship were determined using these tests. Chi squared test was also used to measure and evaluate the relationship between the location of business and whether loan was used for its purpose as well as profit level of business and whether loan was used for its purpose. They were electronically computed using SPSS. Data analysis proved that accessing credit from financial institutions by SMEs in Suame Municipality was challenging due to the inability of SME owners and managers to provide the exact collateral, required guarantors or make special deposits. The study also revealed that most SMEs in Suame Municipality did not use the credit they obtained from the financial institutions for the purpose for which collected them. All the determinants measured had positive relationships with loan utilization with the exception of the number of employees. The study revealed that most SMEs in Suame Municipality had problem in repaying their loans or credits and this was due to factors, which included the loan characteristics, financial institution characteristics and business characteristics.
Description
A thesis submitted to the department of accounting and finance, school of business, kwame nkrumah university of science and technology in partial fulfillment of the requirements for the degree of; master of business administration (accounting option)