The Impact of Small Scale Enterprises Financing in Improving the Social Economic Well Being of Ghana

This research focuses on the impact of small scale enterprises financing in improving the social economic well being of Ghana. It examines the contribution of SMEs to economic development and the constraints they face. The study aims to determine the concepts of SMEs financing, recognize their contribution to Ghana's economy, and identify the constraints of small business success and growth.

THE IMPACT OF SMALL SCALE
ENTERPRISES FINANCING IN
IMPROVING THE SOCIAL
ECONOMIC WELL BEING OF
GHANA

Table of Contents
Topic:...............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
Overview of Research............................................................................................................1
Background of Research.........................................................................................................1
Rationale of Research.............................................................................................................2
Research Aim.........................................................................................................................2
Research Objectives...............................................................................................................2
Research Questions................................................................................................................2
LITERATURE REVIEW................................................................................................................3
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................8
CHAPTER 4: DATA ANALYSIS................................................................................................11
CHAPTER 5: DISCUSSION.........................................................................................................24
Chapter 6: Conclusion and recommendation.................................................................................26
Chapter 7: Alternative method and reflection................................................................................28
REFERENCES .............................................................................................................................29

Topic:
“The impact of small scale enterprises financing in improving the social economic well
being of Ghana”.
INTRODUCTION
Overview of Research
In present time, the extension of medium and small businesses are significant for the
comprehensive development and reduction of poverty (Schwerhoff and Sy, 2017). As each
company or new business needs finance resources to run their activities and operation which help
in reaching the desired objective within specific time period. Small business financing is also
recognised as start up financing which means investing a specific amount in the new business
which benefit the economy as well. Globally SMEs are noted for empowering the economic and
citizens in different countries such as Asia, Europe and North America. The primary focus of
such a study is to examine the existence and attributes of small and medium-sized enterprises
along with the financial restrictions they face. The research is focused mainly on the economic
growth of Ghana because of SMEs financing and is also covers the issues of SMEs in many
other regions of the world of the same primary purpose as this research. In addition, both
quantitative and qualitative is really the existence of the data gathered for such a project.
Questionnaires and surveys are important data-gathering methods. It also reviews relevant
literature.
Background of Research
Small and medium-sized businesses are, internationally, a resource for motivating people
and for economic development. SMEs are linked to economic growth in the Asian and North
American nations and also play a significant role growth of developed nations like the USA. In
Africa, the small and medium enterprise are consider to be most important sectors which account
almost 90 % of total business in urban and rural areas. SMEs are really a significant option for
people to work and induce nations advancement by fostering entrepreneurial as well as
leadership skills between many populations living within a specific country (Savitz, 2013).
Governments in Ghana has enabled attempts to reduce deprivation and stimulate economic
development by growing foreign investment, expanding the economy, developing policy
mechanisms that encourage small company entrepreneurship and at most implementing
1

initiatives for jobs and innovation. To order to be listed as a SME or a micro-enterprise, an
organization must meet the conditions for the number of workers and is one of the specific
financial standards, i.e. whether the net attrition or the current balance sheet total. In addition, it
is also stated that firms must be independent which clarify that if 255 is owned by single party is
just out of the definition of SME.
Rationale of Research
The main reason for conducting research on the impact of SMEs contribution on
economic development in Ghana was because of general interest of participant's (Adusah-
Karikari 2015). All small business have be to be financed equally as they have special operation
which gives an immense satisfaction to the customer and help in developing nation economy
(Sakyi, Commodore and Opoku, 2015). It is also regarded that SMEs are crucial for economic
development as they promote entrepreneurship, reduce poverty and provide more employment
which is essential need for every developing country. Throughout the Ghanaian background, the
National Board for Small Scale Industry (NBSSI) categorizes SME as a company with sales
below US$ 200,000 and equal to no higher that US$ 5 million.
Research Aim
“The impact of small scale enterprises financing in improving the social economic well
being of Ghana”. In the context of the importance of small business financing in Ghana, the
research aim is to determine the contribution of SMEs to the economic development on nation.
Research Objectives
 To ascertain the concepts of SMEs financing to improve the social economy of Ghana.
 To recognise the contribution of Small business financing on development of Ghana
economics.
 To figure out the Constraints of small business success and growth.
Research Questions
 What is the main concept of Small business financing?
 What is the primary contribution of Small business financing on development of Ghana
economics?
 What are the major Constraints of small business success and growth?
2

LITERATURE REVIEW
Literature review is defined as the crucial part of a research study in which significant
information from different sources are collected for making user to easily gets the grasp
understanding about the research topic (Pretty, 2013). A review of literary works is an important
but in-depth assessment of previous research. It is a description and analysis of a specific
research field and helps anyone to read the report and decide how you are doing this particular
work. A thorough review of the literature builds on the factors for choosing a specific research
issue.
To ascertain the concepts of SMEs financing to improve the social economy of Ghana.
There are many factors that keep the company tiny and differentiate it from other
companies. Identifying these companies could be problematic, so throughout this study the main
aim is to explain the reason behind the establishment of small companies as well as small
companies which operating in present time to improve the living standard of people and raise the
social environment. the It is stated that there have been large literature on small business and
their impact on national development in particular time frame. According to EU a firm with
strength of 250 worker, actual turnover of 50 million GBP and have 43 billion GBP on balance
sheet is consider as SME. Many SMEs are already engaged in globalisation, particularly in this
21st century, if they function locally or worldwide. Discussing the growth of SMEs without
trying to make a connection to the globalisation of the economies and hence of the industry is
becoming extremely difficult in the last few decades (Ofori, 2013). This includes small and
medium-sized businesses which are the primary source of individual's jobs and drive countries. It
also enable the growth through encouraging innovation and business knowledge among
populations and expanding both the local manufacturing market and the entire industry. While
subsequent Ghanaian administrations rendered heavy efforts since freedom in 1957 to reduce
poverty and promote economic development by formulating laws that benefit small and medium-
sized enterprises, awareness about the role of SMEs as well as the stage of development in rural
environments in Northern Ghana remains behind. SMEs are the largest industry and constitute
approximately 90 per cent of all rural and urban businesses. These are consider to be a huge
opportunity to work and promote countries' growth by fostering entrepreneurship and leadership
skills within societies
3

Most businesses remain small and casual and then use basic technology which does not
require extensive use of another vital infrastructure. SMEs encourage new ideas and new
innovations, experience economies of scale, variety environments, industry competitiveness,
control power and longevity, and the ability to recruit and maintain talented staff usually rely on
modest growth. It is also stated that there cannot be any emphasize on providing a stable funding
source for SMEs business. If properly constructed and capitalized, small and medium-sized
enterprises have the ability to grow and lead the change with the rapid growth of financial system
of a nation. As per Gill and Biter, (2012) viewpoints there must be enough finance which have a
essential positive impact on the existence and development of small companies and due to their
lack new businesses are not able to succeed (Gill and Biger, 2012). Financial institutions are
essential to Ghana's economic growth, principally through their double mobilizing and resource
allocation functions (Allison, McKenny and Short, 2013). Capital mobilization includes the
collection and regulate of a pool of national and international investments, whereas the capital
allocation method aims at channelling these investments for their most efficient use. This enables
the manager or owner of small business to find the most suitable option of financing which
support in running and managing different business operation (Ochieng, Visseren-Hamakers and
Nketiah, 2013). Manager also make sure that these financing option would be effective enough
that would not be a burden for them in future.
In Africa, the small and medium-sized businesses industry accounts for nearly 90% of all
companies based in both developed and developing countries, offering a more balanced
distribution of income across all regions of the country. SMEs in Africa were thus viewed as a
very significant driver for meeting regional development targets, like poverty reduction and
economic expansion. In Ghana, small and medium-sized businesses are generally categorized as
rural or urban. Rural businesses are person craftsmen, pottery individuals, basket weavers, and
embroidery factions. Include bakery, woodworking, fabrics and clothing services.
To recognise the contribution of Small business financing on development of Ghana
economics.
In the opinion of Schaper (2002), nations which have created financial advances in the
last two generations show without doubt that the growth of entrepreneurialism was the main back
bone of economic development and growth. Growth is fundamentally about increasing social
well-being, reducing poverty and hunger, and providing sustainable and meaningful jobs for all
4

people (Nyame and Grant, 2012). Small businesses are consider to be the main and most
important factor behind a huge number of invention and contribution to the economic
development. It has direct relation with the expansion of national economy of a country as it help
to develop more and more option of job of young generation, includes more Foreign direct
investment and increase the export ratio. In present time, it has been determined that there are
number of beneficial scheme which are launched by governance of different nation with the only
motive to increase the SMEs. For example Twaiwan governance have launched "Branding
Taiwan Program" is a seven-year plan intended to help aspiring small to medium enterprises
(SMEs) establish their unique brand. It was launched with full knowledge of SMEs driving
ability the economic system especially in the medium to long term. Similarly government Ghana
can also certain plans and scheme to reduce the different problems faced by local people and rise
the social economic environment. Despite the vital position that small and medium-sized
businesses play in promoting global balanced industrial growth, Africa also needs to catch up
with the world. Private sector growth is extremely volatile across Africa. SMEs in South Africa,
Mauritius and North Africa are developing because of transparent and advance financial system
and financing option as well as policies of governance which help in developing SMEs. The
corporate market in Africa is essentially uncontrolled micro-enterprises, working alongside big
companies. Many businesses remain tiny since the corporate market is young and that there are
legal and financial barriers to capital accumulation (Adom, 2014). The lack of availability to
financial products is a vital restriction to most small companies in Ghana. In Africa, the option of
SMEs within the industrial segments are depended upon the different propositions such as large
scale industry, Small and medium scale companies and must be labour intensive, making work of
more worker per unit. Interestingly small businesses make greater use of limited resources than
big-scale companies. The explanation for that is not hard seeing, SMEs are employment-
intensive with little invested capital. Therefore, it's been claimed that fostering the SCE industry
in underdeveloped countries like Ghana would generate further job opportunities, contribute
towards a more equal distribution of income and achieve higher productivity through improved
technology. Consequently, they appear to experience higher productivity of wealth which is also
an economically sensible expenditure (Konadu-Agyemang, 2018).
The NBSSI is the main governance regulatory body in Ghana which is responsible for the
expansion and growth of medium and small scale companies. The government considers the
5

industry as having the ability to make a significant contribution to lowering high unemployment
and to the development of Ghana's economies. SMEs make up a significant portion of Ghana's
business activity and can play a major role in reaching the output goals and objectives. The long-
term objective is for small and medium companies to optimize their participation to the
economic and social development of the nation in terms of manufacturing, distribution of income
and employability, and the greater integration of people and women with the nation's economy in
rural communities. Though established world markets might be declining because of the current
economic and financial problems. Ghana's size of the market is increasing and prospects
throughout Africa are indeed starting to look promising for small and medium-sized businesses
in the retail, food service, pharmacy, IT, agriculture and manufacturing industries. SMEs in
Ghana's main responsibilities are in agricultural production, production, trade and service.
Consequently, small and medium-sized enterprises have an important major role in promoting
growth, creating employment and helping alleviate poverty in Ghana. It is also stated that Ghana
has reported that small and medium-sized businesses compensate for 92 per cent of all
companies in Ghana and generate around 70 per cent of the country's GDP. Today, SMEs
compensate for more than 75 per cent of total jobs in the nation. Given the introduction of oil
and gas in Ghana, the percentage of SMEs is rising. This is because in the recent time there have
been number of policies and standeard which are made by the governance of Ghana for
companies which are dealing in oil production activities. In recent time, September 2019 Ghana
produced 203 thousand barrels of crude oil a day. Ghana's crude oil production rose from
110,000 barrels per day in October 2014 to 203,000 barrels per day in September 2019,
increasing at an annual average pace of 2.86%.
To figure out the Constraints of small business success and growth.
Due to the vast market reforms in the African region, small and medium-sized enterprises
face a range of limitations such as Lack of scope and scale in main development variables, and
higher production cost of operation to smaller companies (Glemarec, 2012). Some of the main
constraints are discussed underneath:
 Input Constraints: SMEs experience a number of restrictions on their factor market.
However, the many important restrictions have been the supply and expense factor. The
particular problems varied by region, but many of them were linked, depending on
whether the client considered their access, quality or cost to be the most important issue
6

and whether they were primarily supported or national inputs. Such as in Ghana small
and medium-sized enterprise have been facing the problem of high cost on attaining the
raw material which might because of improper money management or lack of cash flow
understanding.
 Finance: Manage and assess to finance is continued to remain a strong limitation on the
part of Ghana's small companies (Giese and Thiel, 2014). This arises from the fact which
SMEs have restricted access to resources economies, local and international, in portion
due to increased risk belief, information obstacles and higher traditional banking costs for
smaller companies. As just a result, small and medium-sized entities can not receive
long-term investment funds financing. Most SMEs are viewed as unsafe businesses so
many financial companies consider investment banking for SMEs more challenging.
However, many funding programs for SMEs still operate in Ghana, including GRATIS,
FUSMED, NBSSI/BAC and MASLOC. Many micro finance organizations like Pro
Credit and Sinapi Aba Bank today also support small to medium-sized companies.
 Equipment & Technology: SMEs are struggling to gain exposure to relevant solutions
and knowledge on available strategies. It inhibits creativity and productivity for small
and medium enterprises. In most African states, including Ghana, the obstacle remains to
connect native peoples small businesses with international investors and to accelerate
technical upgrades. The rural and urban regions have an achievement gap. Without any
electricity supply in many other rural areas, Connectivity in any company is next to
difficult. Therefore, although technological innovation is intended to bring about
economic reform in rural areas, it does not seem to respond to the rural businesspeople
sufferings.
 Domestic Demand: Latest economic reforms have resulted in a reduction in the
government's position in productive work but a revived private sector investment has
established new possibilities for SMEs. However, limited access to government
agreements and sub contractors, resulting from complicated bidding processes and lack of
knowledge, prevents SMEs from participating in those markets (Fowler 2013).
Ineffective networks of allocation, often controlled by larger companies, also pose
significant constraints to industry direct exposure for SMEs. As for Ghana, demand
limitations have restricted the development of SMEs.
7

Therefore, regulatory constraint have also impact on the small companies such as higher
beginning-up costs for businesses, such as the requirements for licensing system, will impose
unnecessary and excessive strains on SMEs. The rising costs of prosecuting legal actions and
lengthy gaps in judicial proceedings negatively affect small and medium sized businesses.
Absence of management know-how imposes major restrictions on the growth of SMEs.
Although small and medium-sized enterprises tend to draw disciplined administrators, they can
not remain competitive with larger companies. The lack of managerial expertise, which is
widespread in most of the region's nations, seems to have an overstated effect on SMEs.
8

CHAPTER 3: RESEARCH METHODOLOGY
Research types: Research is important to find out which treatments work better for patients. It
plays significant role in discovering new treatments and assure that using data in best possible
manner. It is categorised in two types such as: Qualitative Research: It is outlined as a market research method that concentrate on
generating information by open ended and conversational communication. Through this
research understand reason, views and encouragements (Shen, Muduli and Barve, 2015).
 Quantitative Research: This research methods are designed for bring out as well as
thoughts of target audience with reference to a particular topic. It is utilised to by
researcher to determine the issue by way of collecting numerical data that can be
converted into useful statistics.
In order to collect information conduct quantitative research in which collect numerical
data and analysis facts about small enterprises.
Approach for Research: It is a plan & procedure where involves particular steps of wide
predication in detailed manner for the collection of information, determination and interpretation.
There are mentioned two type of approaches in the context of small business research such as: Inductive Approach: This approach apply be researcher to collect data which is related
with particular topic of research. There are consisting of search of pattern by observation
and the developments of analysis theories.
 Deductive Approach: In this research afraid with developing a hypothesis based theory
after that designing a research strategy to attempt the hypothesis.
There are selecting inductive approach to collect actual information for the research.
Philosophy of Research: A research philosophy is belief that it is a way in which data
related with the phenomenon should be collected, determinates and utilised. It is classified into
two forms like philosophy of science which is positivism and interpretivism. To collect
information about small scale financing and their impact on social economic activities
(Teschner, 2012). The interpretivism approach applied by researcher to collect information
through interview as well as observation. In positivism philosophy consist of natural phenomena
and relations so all the information traced from experience. To conduct research, researcher
select interpretivisim philosophy to take right decision.
9

Data Collection Tools: To conduct research require to different types of methods that
helps to collect information and help in research. There are defined different types of methods
underneath:
 Questionnaire: In this method researcher prepare sample question in regard of research
topic and asking question from the public and know their views (Stewart, 2016).
 Observation: This method applied by the researcher for the sociological research in order
to determine responses of questionnaire which is related with thinking of people and do
as revealed by what they put on paper.
 Interview: It is another technique of data collection that is apply by mostly researcher for
every field of social research. It is more flexible tool which is written inquiry forms and
accept explanations and fluctuation as per the situation.
From different tools researcher select questionnaire method to collect data for research
and use for further work.
Time Scale: To conduct the research require some time so for this require to complete
research in articular set time from the beginning to finishing. Every activities present in the Gantt
chart that is important tool and for this require about 2 months.
Techniques and procedures and research instrument: A questionnaire is a method of
research that involves different types of questions or different kind of question that mainly
utilised by researcher with reason in which can be qualitative and quantitative. Using this
instrument by researcher to collect information in regard of small level finances.
Data sources: It is required to collect data from different sources which is categorised
into two forms such as primary and secondary. Primary source: There are consisting of those information which are collecting by
researcher directly by observation, focus groups and interviews.
 Secondary source: In this source collect information by internet, research articles, library
searches etc.
The researcher select to primary sources to collect information for this apply data
collection method of questionnaire (Tsikata and Yaro, 2014) .
Data collection:It is a procedure of collecting and measuring data on variable of interest
which is established in systematic manner that allows one answer begin from research question,
test hypothesis and analysis results. Data collection part of research in which all fields study
10

about the physical and social science discipline etc. The data collection based on the primary and
secondary information in which primary information researcher collect information own self and
in secondary use past information. The researcher collect data through primary resources to
know about small level financing and impact on social activities in Gahna.
Research sampling (30 respondent): It is mainly categorised into two sections like
probability and sampling of non probability. For this research, researcher select the method of
non probability in which select particular sample group from the population. According to this
approach focus on timing, cost and work force. While, probability sampling is not suitable
method according to timing and abilities of researcher (Yeboah, 2015).
Research ethics: Ethics are moral principles in which different person must follow
regardless place or time. In research ethics concentrate on the moral principles in which
researcher must move for particular fields of research. There are important research ethics that
follow by people like secrecy and security.
Research limitation: It is analysed that there are different types of drawback that come in
this research when collection data about particular topic from the respondents. It supports to a
researcher in performance of each and every activity in effective way to get suitable outcomes.
Research reliability and validity: It is essential that at the time of research must focus on
the reliability and validity. It is mainly based on the questionnaire which is part of the collection
method. Many respondents provide wrong information so researcher must cross check about the
data and try to collect accurate and actual data (Teschner, 2013).
11

CHAPTER 4: DATA ANALYSIS
The methodology of calculating and analysing appropriate details utilizing different
analytical and insightful methods and describing why all components of the information received
are best evaluated in the business circumstance is known as data analysis (Donkor, 2019). It is
acknowledged that data is collected, post-checked and analysed for a given topic in order to
reach a viable solution or decision. There have been various valuable methods, like data analysis,
data visualization, text processing and data management, to conduct the process of data analysis
that allows to achieve the maximum outcomes acceptable for a particular subject. This section of
the research is anticipated to become the most fundamental component which demonstrates the
intent and implications of the project correctly. The principle of data analysis is important for the
current research, since it involves different phases that aid in producing significant results. Such
steps include data modifying, quality evaluation, quality assurance and consolidation of tests, use
of statistically significant approaches and accurate evidence representations. In order to complete
the particular research on The impact of small scale enterprises financing in improving the social
economic well being of Ghana 30 respondent are selected.
Questionnaire
Name:
Age:
Gender:
Contact no:
Occupation:
Q1) Do you have information about SMEs financing?
a) Yes
b) No
Q2) What is the major role of Small Scale Enterprises financing?
a) Improving credit infrastructure
b) Providing funds
c) Unlock sources of capital
Q3) Does SMEs contribute towards to economic development on Ghana nation?
a) Yes
12

b) No
Q4) What is the contribution of Small business financing on development of Ghana
economics?
a) Reducing poverty and hunger
b) Providing sustainable
c) Increasing social well-being
Q5) Does small and medium enterprises give contribution towards generating employment
opportunities in Ghana for economic growth?
a) Yes
b) No
Q6) What is the reason for underlining the Micro and Small Scale Enterprise in Industrial
Development of Ghana?
a) Creation of employment opportunities
b) Contribute to national development
c) Gross Domestic Product
Q7) What are the Obstacles faced by SMEs in Ghana?
a) Access to finance
b) Tax rate
c) Transportation
d) Political instability
Q8) What are the main Constraints of small business success and growth in Ghana?
a) Input Constraints
b) Finance constraints
c) Managerial constraints
d) Regulatory constraints
Q9) Does Institutional and Government Support to SMEs in Ghana?
a) Yes
b) No
Q10) Provide any recommendation to increase the impact of SMEs on economical
development.
13

Data Distribution
Q1) Do you have information about SMEs financing? Frequency
a) Yes 20
b) No 10
14

Q2) What is the major role of Small Scale Enterprises financing? Frequency
a) Improving credit infrastructure 12
b) Providing funds 10
c) Unlock sources of capital 8
Q3) Does SMEs contribute towards to economic development on Ghana
nation? Frequency
a) Yes 18
b) No 12
Q4) What is the contribution of Small business financing on development of
Ghana economics? Frequency
a) Reducing poverty and hunger 15
b) Providing sustainable 8
c) Increasing social well-being 7
Q5) Does small and medium enterprises give contribution towards
generating employment opportunities in Ghana for economic growth? Frequency
a) Yes 25
b) No 5
Q6) What is the reason for underlining the Micro and Small Scale
Enterprise in Industrial Development of Ghana? Frequency
a) Creation of employment opportunities 10
b) Contribute to national development 10
15

c) Gross Domestic Product 10
Q7) What are the Obstacles faced by SMEs in Ghana? Frequency
a) Access to finance 8
b) Tax rate 6
c) Transportation 5
d) Political instability 11
Q8) What are the main Constraints of small business success and growth in
Ghana? Frequency
a) Input Constraints 6
b) Finance constraints 10
c) Managerial constraints 8
d) Regulatory constraints 6
Q9) Does Institutional and Government Support to SMEs in Ghana? Frequency
a) Yes 16
b) No 14
Q10) Provide any recommendation to increase the impact of SMEs on
economical development.
Theme 1: SMEs Financing.
Q1) Do you have information about SMEs financing? Frequency
16

a) Yes 20
b) No 10
a) Yes b) No
0
5
10
15
20
25
20
10
Interpretation: The above graph and tables shows that most of the respondent selected
for the research state that they have enough idea about small scale financing. From 30 candidates
20 believe that SMEs financing is a crucial task in the developing country like Ghana that help in
adding several kind of opportunities and possibility of growth. While remaining member believe
that financing for small or new business would increase the liabilities for an individual which
cloud lead to negative impact on the living in case if business fails of profit are not appropriate.
Theme 2: Role of SSEs
Q2) What is the major role of Small Scale Enterprises financing? Frequency
a) Improving credit infrastructure 12
b) Providing funds 10
c) Unlock sources of capital 8
17

a) Improving credit infrastructure b) Providing funds c) Unlock sources of capital
0
2
4
6
8
10
12
14
12
10
8
Interpretation: It has been determined front the above tables that people have a good
knowledge and understanding about the concepts of SMEs. As when research ask the question
about the main role of SMEs financing there were positive responses from the selected
candidates. 12 member thinks that SMEs have the main role of improving the credit facilities and
strengthening the financing infrastructure services in developing countries. 10 respondent
assumes that availability of fund are always the main duty of SMEs financing while 8 people
thinks that unlocking the sources of capital was the key role which help in several kind of
improvement.
Theme 3: Contribution to economic development
Q3) Does SMEs contribute towards to economic development on Ghana
nation? Frequency
a) Yes 18
b) No 12
18

a) Yes b) No
0
2
4
6
8
10
12
14
16
18
20 18
12
Interpretation: The above graph is effective enough to define that SMEs have a major
contribution towards the economic development of Ghana. 18 people thinks that small medium
enterprise have a positive impact on the development and growth of Ghana by providing number
of useful services and product which would add value to the life of population living in country.
As well as it also increase the domestic trade and have a greater contribution to the nation GDP.
On the other side 12 people believe that development of Small business would be adverse to the
nation as it would increase the pollution level and pollute the air, water as well as land. In
addition SMEs also lead to exploitation of resources and new business tries different things to
make profitable business due to which they disturb the ecosystem.
Theme 4: Development of economy.
Q4) What is the contribution of Small business financing on development of
Ghana economics? Frequency
a) Reducing poverty and hunger 15
b) Providing sustainable 8
c) Increasing social well-being 7
19

a) Reducing poverty and hunger
b) Providing sustainable
c) Increasing social well-being
0
2
4
6
8
10
12
14
16 15
8 7
Interpretation: In the above graph it is clearly defines that respondent have a strong
believe in the SMEs contribution towards the economic development of Ghana. Different
candidates have different viewpoints such as 15 thinks that it help in resolving the issue of
poverty as well as gives more option of food stuff that make people to eat unique goods at lower
cost. In addition 8 persons have a strong believe that SMEs have a major role in providing
sustainability to the financial structure of whole nation and 7 candidates thinks that it also help in
improving the social well being that grows the economy (Fening, 2012).
Theme 5: Employment opportunities
Q5) Does small and medium enterprises give contribution towards
generating employment opportunities in Ghana for economic growth? Frequency
a) Yes 25
b) No 5
20

a) Yes b) No
0
5
10
15
20
25
30
25
5
Column B
Interpretation: On the basis of above questionnaire, it has been determined 25 people
have a strong believe with the facts that small companies and new start ups have a crucial part in
growing employment opportunities. This is because SMEs requires enough staff member to run
various operation and make availability of services and product to the customer. This also gives
chance of growth to local producers and manufacture and business have to make availability of
raw material at lower cost. Some respondent are not agreed with the facts due to different
viewpoint as they thinks it just damage the natural surrounding.
Theme 6: Industrial development
Q6) What is the reason for underlining the Micro and Small Scale
Enterprise in Industrial Development of Ghana? Frequency
a) Creation of employment opportunities 10
b) Contribute to national development 10
c) Gross Domestic Product 10
21

a) Creation of employment opportunities
b) Contribute to national development
c) Gross Domestic Product
0
2
4
6
8
10
12
10 10 10
Column B
Interpretation: In the viewpoints of researcher it is determined from the above graph
that there is a positive reason for underlining the Micro and Small Scale Enterprise in Industrial
Development of Ghana. It is strongly believe by the people that small companies gives more and
more employment chances for the new generation, it also plays significant role in the developing
the national economy and growth. It is also observed by the researcher that 10 people assume
that it also increase the GDP of a country while giving better option of revenue generation and
improving the import and export services.
Theme 7: Major Obstacles
Q7) What are the Obstacles faced by SMEs in Ghana? Frequency
a) Financial Restriction 8
b) Tax rate 6
c) Transportation 5
d) Political instability 11
22

a) Financial Restriction b) Tax rate c) Transportation d) Political instability
0
2
4
6
8
10
12
8
6
5
11
Interpretation: From the above tables, it has been founded that there are number of
obstacles which are faced by the SMEs in Ghana. 8 people assume that financial restitution are
the main reasons behind the decline growth of SMEs in developing nation. 6 candidates thinks
that high tax rate, 5 respondent assumes that lack of proper transportation services are consider to
be the major problem faced by new companies in Ghana (Demirgüç-Kunt and Klapper, 2013).
On the other side 11 people strongly believe that due to political instability SMEs are not able to
succeed and grow in respective nation.
Theme 8: Constraint to growth of SMEs
Q8) What are the main Constraints of small business success and growth in
Ghana? Frequency
a) Input Constraints 6
b) Finance constraints 10
c) Managerial constraints 8
d) Regulatory constraints 6
23

a) Input Constraints
b) Finance constraints
c) Managerial constraints
d) Regulatory constraints
0
2
4
6
8
10
12
6
10
8
6
Column B
Interpretation: According to the above question, it is clearly determined that different
type of constraint have a negative impact on the development of small business in Ghana. Such
as 6 candidates assume that input constraint are the main, 10 strongly believe that finance
constraint are the main reasons of decline development of SMEs. It is also observed by
investigator that 8 candidates thinks that managerial constraint and regulatory constraint have a
major negative impact on the decrease growth of small companies in respective country.
Theme 9: Institutional and Government Support
Q9) Does Institutional and Government Support to SMEs in Ghana? Frequency
a) Yes 16
b) No 14
24

a) Yes b) No
13
13.5
14
14.5
15
15.5
16
16.5
16
14
Interpretation: The above graph clearly discuss that there have been strong
governmental and industrial support to SMEs in Ghana. 16 candidate thinks that government
have developed number of effective scheme and policies for SMEs which help owner in easy
establishment in Ghana. Government have make sure that there will be specific land allotted for
the development of new companies which would not impact the living hood in country. It is also
determined that 14 respondent believe that in sometime government of Ghana will totally ban the
development of new and small business as it disturb the entire working scenario.
25

CHAPTER 5: DISCUSSION
This analysis segment is a summary of what this thesis was trying to examine, what are
actual results, what assumptions are made from the studies and what suggestions can be
produced (Blaikie, P., 2016). First, despite multiple benefits of small and medium-sized
enterprises in terms of job formation, GDP output but as the catalyst for economic development,
small and medium-sized enterprises do not yet provide the necessary funding to achieve these
goals. From the above discussion it is also determined that micro loans are also given to SMEs
that are best credit facilities and is also regarded main solutions offered to insufficient resources
to small companies. Governments and policy specialists also acknowledged SMEs as main
engine of economic development as well as a significant factor in the promotion of the
production and cooperation of the private industry. The advancement of the small and medium-
sized businesses sector therefore constitutes an important element in the development strategy
for most countries and is of special importance throughout the case of Ghana. SMEs not just to
lead to higher standard of living, job creation and poverty alleviation but also offer significant
domestic resources and higher productivity rates. Small companies are constantly regarded from
a preparation point on as the primary means of achieving balanced and competitive economic
long term growth and development. Small company viability and survival could be the
explanation why participants tend to support setting up similar companies somewhere else in the
area. Small company viability and survival could be the explanation why participants usually
support setting up businesses somewhere else in the area (Atkinson and Messy, 2013).
Governments in Ghana also tried to tackle the issues of small and medium-sized businesses,
which suggests that policymakers have always recognized the important role and importance of
SMEs as the potential treatment of economic growth and progress. The above research also help
to figure that that SMEs reflects the major emphasis sub-sector in any significant economic
transformation plan aimed at generating jobs, eliminating poverty, food safety, rapid
urbanization, and curbing rural-urban immigration. From the questionnaire it is also founded that
most of the respondent are agreed with the facts that small business financing would lead to the
overall immense success to growth of GDP. It also encourages development by promoting
competition and business skills across communities and increasing both the local production
sector and the market as a whole. Many companies stay small and informal, and use advanced
26

technology that does not entail the intensive use of such a key infrastructure (Angelucci, Karlan
and Zinman, 2015).
27

Chapter 6: Conclusion and recommendation
To ascertain the concepts of SMEs financing to improve the social economy of Ghana.
In conclusion it is stated that local customer shop at small businesses which are located
within communities, so on specific income SMEs pay tax and these tax dollars stay within the
local economy. This contribute directly to improve the community as a result. Small businesses
are job creators and most of those jobs are for local people. Rather than having to commute to
another city it provides benefits to employees to work closer to home. Small and medium scale
enterprise is important for contributor for the improvement of Ghana as point out through
outcome in the particular research. Therefore, use of family labour and unconcerned employees
to subvert the future advantages of such businesses. It can not be deuced solely on the
entrepreneurs due to try for reducing cost which is mainly related with the preventive amount of
usage. The facts are presenting in presence of SMEs change the infrastructure improvement
which has not supported through study when respondents disagreed about the construction of
road and other developmental projects related to particular community that is related with the
outcome of SMEs. The profitability of small business become reason of increase employment,
GDP rate and many other things. The small scale enterprise financial show positive impact in
every manner because it is beneficial for government and increase economical and social
activities. As per the overall analysis it is finding that SMEs are essential for entrepreneur due to
economic & social growth in Ghana. The outcomes of particular study are mainly work with
existing theories in selected field and repeat link under performance and organisational cost of
entity to government activities and inactions.
To recognise the contribution of Small business financing on development of Ghana
economics.
In the conclusion, policy actions should include better information provision regarding
the various sources of finance. This could involve the financing initiatives pursuing a more
aggressive and continuous marketing communication campaign to inform SMEs of the various
financing schemes available to the sector. As per the research it is recommended that SMEs in
Ghana have a long way to go for particular sector which is related, productive and play essential
role as per the expectation and contribution for the growth and improvement of economy of
Ghana. The SMEs face different types of challenges in the business which are irresistible and
handle by particular approach by the every stakeholders. In the context of SMEs impact on the
28

government, tax director, banks, regulatory authorities, the staff members, small level agencies
and many others. The government get benefits through SMEs due to enhanced entrepreneurship
to educational system to create it more functional, relatable and work oriented and driven. These
are impacted on the advanced technology and studies of entrepreneurship with aimed of
producing businessmen. There is applying changes in culture, atmosphere and value system in
context of Ghananaians attitude, motivation, ethics which is required for the making better nation
than in present time. The education system is mainly started with primary and secondary tertiary
that impact on the cultural activities and concentrate on the system studies by the different
stages. For this required to technological and entrepreneurial studies which is autochange or local
dialect to assure about the understanding and motivate to students. The particular method use to
increase fast and full combination of new beliefs into the culture of these young impressionable
Ghananians.
To figure out the Constraints of small business success and growth.
In end of report, it is concluded that different problems and constraints faced by SMEs
can be resolved such as projecting cash flow for the year which help to detect the entire position
of cash. Time must be traced properly and there must be specific spending to accomplish tasks
and manage that time to eliminate the minutes lost on unproductive task and activity. A change
in value system that take place due to high premium and identify of entrepreneurial perspicacity,
loyalty and capability to make effort for society through intervention or possibilities of
employment for local people. There are enhancing quality of leadership and likes to introduced
the particular educational system that related with the technological thrust. In the context of vein,
civics, war for corruption and many other things introduced by primary and secondary sources
through educational system with system and technological studies. It is required for government
to remap the SME sector of economy to deduct the growing unemployment rate in the nation that
helps to reduce poverty level, increase standard of living and estimate about the economic
growth and improvement. Ghana can not develop without a spirited SME sector so require to
provide finance to these companies who wants to start their business and chances to get success
in future. Government should readily and freely analysis prospective of entrepreneurs in order to
analysis different information which is related with business opportunities, advance technology,
market, raw material, plant & machinery.
29

Chapter 7: Alternative method and reflection
As per the above study, by selecting different types of research methodologies to collect
information about the small level financing and examine about the motivation for a business
entity. I have got many chances to look out differences between primary as well as secondary
research. For this research I can work in a team and conduct study on different topics which is
important in particular study skills. I had enjoyed the memorising academic concepts and ideas
so applied again this method to conduct research. To work on this topic in future required to
collect all the information in systematic manner for higher efficiencies and fulfil the requirement
which is require to achieve. In a team, work in well manner and provide potential things to
present new concepts to meet the new objectives of study. To organising written book in good
manner, I have applied conceptual ideas that related with academic books and professional
analysis all the areas where collected data for the research. Along with, explore more sources to
collect all the information because less sources create problems and examine all areas for more
research. It is direct impact on the performance and results that receive through study and
overcome those problems that create in between the research.
30

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