Investment readiness and access to external finance among Ghanaian small and medium-size enterprises

Abstract

The importance of SMEs in the process of transitioning from a planned economy to a market economy is now recognised in the body of knowledge on SME investment readiness. This study examined the investment readiness of SMEs and its access to external finance in the Accra Metropolis in Ghana. A mixed method approach, employing both quantitative and qualitative research methodology were utilised. Face-to-face interviews, using questionnaires were employed to collect data from 500 owner/managers of SMEs in the metropolis. The results of the study revealed that investment readiness variables such as owner/manager's age, financial leverage and financial information had significant positive relationship with access to external finance of SMEs. It was recommended that government should support SMEs and also develop programmes to enhance investment readiness amongst SME owner/managers.