Financing SMEs in Ghana: evidence of the optimal credit guarantee ratio

Sun Wubin, Jafaro Arthur and Emmanuel Kwesi Agyapong

International Journal of Trade and Global Markets, 2022, vol. 15, issue 1, 88-95

Abstract: Inadequate access to finance by small and medium scale enterprises (SMEs) in Ghana prevents SMEs from thriving and making impact in the global market. Therefore, it is essential to adopt a financial strategy to provide SMEs with adequate and stable finance. This research adopted a theoretical model and an empirical analysis to calculate for the optimal credit guarantee ratio that government should provide to support SMEs in Ghana. The results show that optimal credit guarantee ratios vary from each bank or group of banks based on their healthiness which ensures efficiency and stability of lending to SMEs.

Keywords: inadequate access to finance; SMEs; small and medium scale enterprises; optimal credit guarantee ratio; global market; lending to SMEs; healthiness of banks. (search for similar items in EconPapers)
Date: 2022
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