The Impact of Micro Credit on Small Businesses. Evidence from Microfinance and Small Loans Center (MASLOC)

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This study sought to establish the impact of micro credit on small businesses with evidence from MASLOC. The study used a causal and descriptive design to establish the relationship between sales performance and access to credit in the SME sector in Ghana. Cross sectional survey was used to gather relevant data for the study using self developed questionnaire. The target population was that of the micro businesses in Madina with a sample size of 120. The data analysis made use of tables, bar charts and graphs. The study was employed both descriptive and inferential statistics to assess the influence the relationship between credit access and SME performance. The study revealed that on the effects of credit access on sales, it was quite clear that sales tend to increase after capital injection from MASLOC. The impact of access to credit had statistically significant influence on sales performance. The study also found that capital investment had a positive and statistically significant impact on sales performance but the use of credit for recurrent expenditure has a negative but statistically insignificant impact on sales performance. Beneficiaries should be educated to know the implications of their acts on the business as far as the loan repayment is concern. Only incomes from the business should be used to pay for such expenses. Finally, to increase the impact, the loan products have to fit the financial needs of a wider range of household economic activities. This will however help reduce diversion and a significant reduction in the defaulting rate of customers.
A Thesis to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the Degree of Commonwealth Executive Masters in Business Administration