Access to microfinance by small and medium enterprises in the Accra Metropolis

Abstract

This study examined access to microfinance by Small Medium Enterprises (SMEs) in the Accra metropolis. A survey was therefore designed to evaluate the access to SMEs in the metropolis of Accra. The population of the study was 50, which comprised SMEs and Microfinance Institutions (MFIs). A sample of thirty-four SMEs and 6 MFIs were used for the study. An interview guide and a questionnaire were used separately to collect data from MFIs and SMEs. The return rate of data was 6 (75%) for MFIs and 44(88%) for SMEs. Data collected was analysed manually and electronically. The statistical product and service solution was used for the electronic analysis in which descriptive statistical tools was used for data presentation and discussion. Results of the study indicated that access to MFIs by SMEs positively reflected on the social and economic lives and their operations. The businesses were able to increase their capital, assets and expanded SMEs which reflected in their social lives. Employment opportunities and saving culture of SMEs was enhanced. In spite of the benefits, there were some challenges which included repayment difficulties, payment of multiple taxes, and lack of market for products and services plus high lending interest rate. The study therefore recommends the need to put in measures like reduction in high interest rate, training of managers of SMEs on proper business practices including proper financial accounting of their business transactions.