Abstract
Financing Small and Medium-Scale Enterprises (SMEs) to achieve the desirable growth and expansion has been topical for governments, policymakers, non-governmental organizations (NGOs), financial and non-financial institutions. The recent upsurge in the interest of finding ways of bridging the financing gap faced by SMEs by these stakeholders have been necessitated by the enormous contributions of SMEs to the economic development and growth of countries in areas of job creation, GDP and entrepreneurial skill development. This research therefore sought to access the role of one of the stakeholders, microfinance institutions (MFIs) in helping to bridge the financing gap faced by SMEs in Ghana. The research established that there was indeed the existence of SME financing gap in the country as most of them were denied access to credit by commercial banks and other financial institutions. The research revealed that the operations of microfinance institutions (MFIs) are having positive impact on SMEs. The study also revealed some risk mitigation tools used by MFIs in granting loans to SMEs which included provision of collateral security in the form of land or any other valuable asset, business records, credit history among others. The research concluded with some recommendations on how the SME financing gap can further be bridged by MFIs and other stakeholders which included provision of support services to SMEs by MFIs such as training services in credit management as well as the need for MFIs to improve service delivery such as faster loan approval times.
Highlights
The growth of Small and Medium-Scale Enterprises (SMEs) has been in the recent past a great concern to many governments, policy makers and researchers universally because of realization of their economic contribution to Gross Domestic Product (GDP) and economic growth
SMEs play a significant role in the economic development of Ghana and the general wellbeing of the citizenry
The growth of SMEs is usually hampered by limited access to credit especially by banks despite their significant contributions to economic development
Summary
The growth of SMEs has been in the recent past a great concern to many governments, policy makers and researchers universally because of realization of their economic contribution to Gross Domestic Product (GDP) and economic growth. As such they are no longer viewed as “stepping stones” to real business but as a means of industrial and economic growth and as well as tools of poverty eradication [1]. Dynamic medium-sized enterprises provide a competitive edge in two ways—as leading subcontractors and as venture firms in their own right They tend to survive longer than most SMEs and create jobs that yield higher returns, multiplying their impact on economic growth [3]
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
