Financing Micro, Small and Medium Enterprises (MSMEs) in Ghana: A case study of Techiman Municipality

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July, 2015
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The dynamic role of micro, small and medium enterprises in developing countries cannot be disregarded because they have been the main mechanism for economic growth and development. Despite this, the MSMEs still encounter many challenges in sourcing funds to grow their businesses. This is averting their contribution to the achievement of developmental goals in many countries of which Ghana is included. The study sought to explore the various sources of finance and the constraints faced in accessing funds by the MSMEs in the Techiman Municipality of Ghana. It also inquired into the role governmental agencies have played in promoting the sector. The study adopted a descriptive research design. Primary data was collected by administering seventy-one questionnaires to MSMEs in the Techiman Municipality. Data were analysed using statistical package for social sciences (SPSS). The findings of the study revealed that among the various internal source of finance, personal savings and retain earnings remain the chief sources of funds to the enterprises, but returns on businesses were too low to support the growth potential of the sector. Microfinance institutions remain the core external sources of funds to the enterprises but constrained by high interest rate and collateral requirement. Therefore it is recommended that, policy makers are to formulate strategies to remove the bottlenecks of accessing external funds to encourage enterprises to access external funds to aid them realize the appropriate growth in their business.
A dissertation submitted to the department of Accounting and Finance, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Master of Business Administration (Finance)