An Examination of Available Sources of Finance and Constraints to SMES in the Wenchi Municipal of the Brong Ahafo Region of Ghana
- April 30, 2019
- Posted by: RSIS
- Category: Business Administration
International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue IV, April 2019 | ISSN 2454–6186
AMPOSAH, Boateng Alfred
Bachelor of Business Administration, Methodist University College, Wenchi Campus, Ghana
Abstract:-This study was conducted to examine the sources and constraints to SMEs financing in the Wenchi Municipal of the Brong-Ahafo region of Ghana. The main objective of the study was to provide an examination of the sources from which SMEs received finance for their operations, the constraints associated with obtaining finances from the available sources and the implication for the growth and development of SMEs in the Wenchi municipality. In order to achieve these objectives data were collected from questionnaire administered to 170 randomly selected SMEs owners and 13 conveniently selected financial Institutions. Analysis of the data revealed that there are available internal and external sources of finances that SMEs in the Wenchi Municipal are able to obtain finances from. The common internal sources include personal savings, sales of assets, retained earnings and equity investment. External sources of finances SMEs are able to access also include loans from financial institutions, governmental agencies, friends and relatives as well as trade credit.Conditions that militate against access to finance noted from the findings includedcollaterals, interest rates, size of credits, maturity time or duration before repayment, general economic conditions, firm-specific situations and bad attitude of lenders towards SMEs. Characteristics such as sex of the SMEs owners, education, sector of SME, length of existence were not found to be significant determinant of access to finance. The study therefore recommend that financial institution should undertake financial management education for SMEs to help them improve their financial management, SME should improve their business management and accounting skills by employing qualified professionals, government should also strengthen its agencies and parastatal that support SMEs financially.
