Exploring barriers to access funding among Small And Medium Enterprises from rural banks in the Ejisu District
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Date
AUGUST, 2015
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Abstract
Small and Medium Enterprises (SME’s) in Ghana play a dynamic role in the development of this nation, and this cannot be over- emphasized. It also serves as a means of employment in the country thus releasing the pressure on the civil and public sector in the case of employment. The study seeks to solve a problem of collateral, track record and high interest rates that deny most SME’s owners access to fund from rural banks. This research explores barriers to access to funding among SME’s from Rural Banks in Ejisu District. The study examine various sources of funds available to SME’s from Rural Banks in Ejisu District; access the costs associated with debt finance to SME’s from Rural Banks in Ejisu District, assess various barriers to access to funding on SME’s from Rural Banks and finally to ascertain the effect of barriers to access to funds on SME’s from Rural Bank in Ejisu District. Data were obtained through twenty-seven item questionnaires from sixty (60) entrepreneurs in Ejisu District. The sample was selected using quota, stratified and convenient sampling method. The data was analysed using Statistical Package for Social Sciences (SPSS) in the form of tables, narrations, regression, charts, etc. The findings of the study indicated that the rigid process that entrepreneurs pass through before they can access loan is tedious. Again, entrepreneurs use their own personal saving as start-up capital. It is recommended that entrepreneurs must regard the track record of their finances and the business as a whole. Again, bank should reduce their interest rate and also eliminate the collateral so that clients can afford to repay their debt. It is believed that if all the recommendations are taken into consideration, it will help reduced the numerous barriers that hinder the entrepreneurs when accessing loan from Rural Banks.
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A thesis submitted to Department of Marketing and Corporate Strategy
Kwame Nkrumah University of Science and Technology School of Business in partial fulfillment of the requirements for the degree of Master of Business Administration (International Business Management-Option).