Firm unique characteristics and access to short-term finance among enterprises in Ghana

Abstract

The relationship between Enterprise unique characteristics and access to short term finance from formal financial institutions was examined in this study. The secondary data set from the 2013 Enterprises Survey conducted by the World Bank on selected enterprises across the whole Ghana was employed for the study. The study adopted a qualitative analysis such as descriptive statistics, percentages and Analysis of Variance (ANOVA) to address the stated objectives. The outcomes suggested that enterprise unique features such as size, age and business location are important variables in explaining enterprises access to finance in Ghana. That is access to finance improves as firm size increase suggesting that micro and small enterprises can be said to be more constrained in accessing bank loans than their counterparts medium and large enterprises. Also, older enterprises were found to have moderate perception of access to finance as a major obstacle as compared to younger enterprises. Enterprises operating in Accra and other business centres were found be more constrained than other operation outside such locations. The study recommend that the concentration on supports for micro and small enterprises must continue but must expand alongside given loans to include technical advice on how to overcome the fear of accepting the responsibility of taking a loan. Also, major supporting policies from government agencies and NGOs must consider other unique characteristics such as age and business location of enterprises. For example, Younger enterprises can be given support irrespective of size since they are equally financially constrained.