Determinants of Small and Medium-Sized Enterprises Access to Financial Services in Ghana

S. N. Dorhetso (), L. Y. Boakye and K. Amofa-Sarpong
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S. N. Dorhetso: Accra Institute of Technology (AIT)
L. Y. Boakye: Accra Institute of Technology (AIT)
K. Amofa-Sarpong: Accra Institute of Technology (AIT)

A chapter in Sustainable Education and Development – Sustainable Industrialization and Innovation, 2023, pp 278-292 from Springer

Abstract: Abstract Purpose: The objective of this study is to estimate the relative degree of significance of the determinants of small and medium-sized enterprises (SMEs) access to financial services in Ghana, using a macroeconomic and institutional framework. Design/Methodology/Approach: A theoretical framework was developed from a mix of the macroeconomic and institutional conceptual dimensions of financial inclusion, and the best-worst method was used to analyse and grade the identified determinants according to their weighted averages. Findings: The findings of this study indicate that cost of borrowing; collateral requirements/risk perception of borrower; firms’ financial characteristics; and, strong banking competition and low information asymmetries are the highest ranked determinants for SMEs access to financial services in Ghana. Implications/Research Limitation: It is projected that the results of this study would significantly contribute to literature on financial inclusion of small start-ups and medium-sized enterprises, particularly in developing countries, and increase their access to financial services, including affordable credit, and their integration into value chains and markets as postulated in the sustainable development goals (SDG 9.3). However, the study had limitations since it was partially based on the opinions of SMEs and bank/financial institution managers in Ghana, which may be characterised with prejudiced judgment and uncertainty. Practical Implication: The outcome of the research would also provide guidance for policy makers on significant determinants of small and medium-sized firms’ access to funding. Originality/Value: This distinct research builds an estimation of the most significant determinants of SMEs access to financial services in Ghana, and validates studies on the determinants of SMEs access to financial services. Nevertheless, the method and context of this study differ from hitherto published papers on the matter.

Keywords: Best-worst method; Determinants; Financial; Services; Affordable credit; SMEs (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-25998-2_21

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DOI: 10.1007/978-3-031-25998-2_21

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