SMALL AND MEDIUM SCALE ENTERPRISES AND ACCESS TO BANK CREDIT: THE CASE OF TAMALE METROPOLIS

Abstract

Access to credit still remains a challenge to Small and Medium-sized Enterprises (SMEs) especially those in developing economies and continues to dominate discussions both within business circles and at the corridor of various governments to which Ghana is no exception. This study attempted to examine access to bank credit in Ghana by focusing on SMEs in the Tamale metropolis. The study explored and investigated the effects of entrepreneurial, firm and financial characteristics on access to bank credit among SMEs in the Tamale metropolis. The study adopted the quantitative approach to research using (80) eighty small scale entrepreneurs from whom data was collected using respondent-friendly questionnaires. Data collected was however analyzed using the SPSS tool (Descriptive frequency). It was however discovered that some entrepreneurial, firm and financial characteristics such as gender, marital status, age, industry sector, size of enterprise, number of employees, business registration, documentation of transactions and effective business planning have significant influences on SMEs credit accessibility in the Tamale metropolis. It was also discovered that, the growth of SMEs, specifically those in the Tamale metropolis are constrained by some factors such as high utility, competition from imported products, inadequate demand for their products amongst many. The study recommended among others, the need for a form of joint venture between financial institutions and SMEs for mutual gains. It was also suggested that, financial institutions serve as growth agents to SMEs in this joint venture thereby providing both finance and managerial advice in order to ensure their growth and sustenance in the economy for accelerated economic development.