Assessing the Administration of Micro-Credit to Small Scale Industries in the Upper Denkyira East Municipal Assembly: A Case Study of the Amenfiman Rural Bank Limited

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Small scale industries play a pivotal role in the economic development of nations by contributing enormously to the value-chain addition process as well as creating gainful employment in the informal sector. However, for this potential of the sector to be realized; the amount of microcredit available to the sector is crucial. Ghana has taken steps in ensuring that small scale industries have access to microcredit through the establishment of rural banks and microfinancial institutions. The study set out to assess the administration of microcredit to small scale enterprises by Amenfiman Rural Bank Limited in the Upper Denkyira East Municipal Assembly. It examines the sectors of the Upper Denkyira East local economy receiving microcredit from Amenfiman Rural Bank Limited. The study then narrows down to the credit facilities available to small scale businesses and the procedure for accessing these credit facilities. It further examines the challenges in microcredit administration to small scale businesses by the bank. Simple random sampling and purposive sampling were used in obtaining data for this research study. The study revealed that Amenfiman Rural Bank administers credit to all the three sectors of the Municipal economy with the agricultural sector being the highest benefactor followed by the small scale industrial sector and the service sector respectively. Limited market, exorbitant rent charges, high interest rate, lack of collateral and guarantors were some of the challenges affecting the bank as well as small scale industries in microcredit administration. The study therefore proposes interventions to remedy the situation in order to streamline microcredit administration by Amenfiman Rural Bank Limited in the Upper Denkyira East Municipal Assembly.
A Thesis Submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Commonwealth Executive Masters in Business Administration, 2011