ACCESSIBILITY AND ROLE OF MICROFINANCE IN THE SMALL AND MEDIUM-SCALE ENTERPRISES (SMEs) IN THE WA MUNICIPALITY IN UPPER WEST REGION, GHANA

Abstract

The backbone of every economy is the private informal sector (SMEs) and most employment in Ghana largely focuses on small and medium-scale enterprises (SMEs ). Hence, the contributions the sector makes to economic growth and development through job creation cannot be overemphasized. However, SMEs are almost entirely expelled from the formal financial sector in Ghana. They face difficulties in accessing financial opportunities, enterprise development skills; face unfavourable regulatory bottlenecks and inappropriate market structures and these therefore has poses serious restriction to their growth and development in the economy. This research was carried out to examine the financial accessibility and the roles it play to the SMEs sectors in the WA municipality in the Upper West Region of Ghana. Existing literature that treat issues relevant to the topic were first reviewed, from which the objectives of the study emerged. The study objective was to examine the extent to which microfinance is accessible to SMEs and the roles it has played in the SME sectors and the impacts on poverty reduction in Ghana. The whole research covered one hundred and thirty (130) SMEs and ten (10) financial institutions. The needed data for the study were generated from both primary and secondary sources. The research tools used to generate the primary data include informal conversations, personal interviews, questionnaires and key informant interviews. However, secondary data were extracted from books, articles, journals, presentation papers and news publications. Mixed model research approach was therefore used to analyze the data-qualitative and quantitative. For the quantitative, SPSS was use in making the analysis and the drawing of the tables and charts. Critical analyses were made for the qualitative analysis aspect. The findings of the study revealed that financial accessibility plays imperative roles in the SMEs sector and poverty reduction because it improves SMEs performance, creates employment, promotes growth, expansion, improvement and development of businesses. It however, enhances income and facilitates the affordability of some basic necessities of life such as; education, shelter, health, good nutrition, clothing, potable drinking water as well as other essential requirements of life like vehicles, motorcycles, bicycles, decent houses and marriage contractions. These have consequently improved the standard of living of many which is translated as poverty reduction, since capacities have been built; self esteems and confidence among the vulnerable in society have been established allowing participation in decision making.