Abstract
It is an undisputable fact that SMEs are important to economic growth and are essential to generate employment. This study establishes the factors that influence the growth of SMEs in Ghana. The study adopted a factor analysis and linear regression methodology to analyze the data. The study employed the random sampling system. The study found out that, growths of SMEs are influenced by five major factors which are family factors, technological factors, experienced, location and human resource. Out of these five factors, three were significantly related to the growth of SMEs. These three factors are experience, human resource and technology. The study concluded that family, experience, location, technology and human resource are factors that influence the growth of SMEs in Ghana. The research therefore recommends that, the owners should take into consideration the training of employees, provision of incentives and also employ highly experienced personnel to manage the affairs of SMEs to improve upon their managerial skills thereby leading to the growth of the business . Keywords: Small and Medium Scale Enterprises, Factor Analysis and Ghana DOI : 10.7176/EJBM/11-3-24
Highlights
The economic crisis experienced by the Kingdom during the 1980s influenced the performance of several key economic indicators; real GDP fell by (11%) and inflation rose by (25%) in 1989, as a result of the balance of payments crisis that led to the collapse of the Jordanian dinar exchange rate
In 1987 and 1988, the government largely turned to internal borrowing to fill the budget deficit, in light of the Kingdom's inability to obtain the necessary external financing, which led to the depletion of the Central Bank's reserves of foreign currencies and the collapse of the exchange rate
The period following the Kingdom's exit from International Monetary Fund (IMF) programs has seen a marked improvement in many macroeconomic indicators; the real GDP of the Kingdom grew by an average of 9.7% during the period (2005-2008) driven by increased global demand for Jordanian goods and services, and restore confidence in the Jordanian dinar after a peg to the US dollar in the mid-nineties
Summary
The economic crisis experienced by the Kingdom during the 1980s influenced the performance of several key economic indicators; real GDP fell by (11%) and inflation rose by (25%) in 1989, as a result of the balance of payments crisis that led to the collapse of the Jordanian dinar exchange rate. In the light of these variables; Jordan has adopted several economic reform plans in cooperation with the IMF and the World Bank to restore macroeconomic stability by minimizing internal and external imbalances such as rising public budget deficits, debt ratios, current account balance of payments and restoring confidence in the Jordanian dinar.
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