Businesses in developing economies, including Ghana, are dominated by Small and Medium-sized Enterprises (SMEs) which provide high employment opportunities, generate significant earnings, and contribute to poverty alleviation. One of the major challenges confronting SMEs has been identified as access to finance. A qualitative phenomenological study was conducted to explore the lived experiences of 15 owners and managers of SMEs located in the Greater Accra, Ashanti, and Western regions of Ghana, in accessing funds from formal and informal sources, and the effects on businesses in Ghana. A purposeful sampling method was adopted to select participants for the study. The modified van Kaam method by Moustakas with NVivo 8 software application was used to analyze and interpret data collected through questionnaires administered on 15 participants. Six core themes that emerged from the analysis of interview data were: (a) Reliance on own funding and short-term overdrafts, which are inadequate, (b) inability to provide collaterals, (c) bureaucracy, (d) bribery and corruption, (e) leadership style, and (f) difficulty in expanding business. Major findings from this study showed that SMEs are incapable of accessing medium to long term loans from formal banks because they cannot meet the demand for collateral and do not seem to be aware of credit schemes set up by central government to support them. The study also concludes that the high interest charged on loans, bureaucracy and bribery make the cost of borrowing very high, leading to high operational costs of running SMEs. The implication of the study is that SMEs cannot achieve significant growth to play vital roles such as employment generation, poverty reduction, and revenue generation and distribution in the economy of Ghana.
|Commitee:||Ahmed, Mohammed, D'Urso, Patricia|
|School:||University of Phoenix|
|School Location:||United States -- Arizona|
|Source:||DAI-A 74/12(E), Dissertation Abstracts International|
|Subjects:||Experimental/theoretical, Small business, Capital & debt management, Africa, Entrepreneurship|
|Keywords:||Collateral, Difficult access to funds, Family business, Ghana, Loans, Poor record-keeping, Small and medium-sized enterprises, Weak corporate governance|
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