Financing of SMEs in Ghana. A case study of banks in Kumasi.

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May, 2016
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This research work examines financing of SMEs by Banks with emphasis on Owner Characteristics (that is Age, Education, Gender, Personal attributes). This is as a result of the fact that most banks concentrate on collateral as one of the determinant of loans assessment by SMEs. Most SMEs are unable to meet these collateral requirements by banks hence a hindrance to the loan acquisition by SMEs. This current study revealed that amidst the challenges, SMEs owner characteristics was identified as a variable that banks could depend on to some extent to grant credit facilities to SMEs. A structured questionnaire was employed with a sample size of 120 respondents among banks with interest in SMEs activities to gather data in Kumasi. A simple linear regression was used in the analysis of data to generate the desired or appropriate results. The results of the analysis showed that Education, Age of Business, Personnel attributes are a significant variables that influence SMEs access to loans from banks. Gender did not play a role to influence SMEs access to loan unless the SMEs loan is gender specific. The policy direction for this research work is that banks and non-banks financial institutions should also pay attention to SMEs owner characteristics even though collateral forms a major part in access to loans by SMEs.
A thesis presented to the Department of Economics in partial fulfillment of the requirement for the award of the degree of Master of Science in Economics,