Abstract:
The importance of Small and Medium Scale Enterprises is being considered
crucial to the economic development strategies of every economy. It is therefore,
important to consider conditions that would ensure sustained growth in this sector.
Finance is considered as the life blood of every organisation and most firms rely
on finance not only for survival but for growth and expansion. Access to finance
is usually restricted to SMEs by financial institutions with simple reason that
SMEs have high risk of default. It can be observed from research reports that,
most developed and some developing countries have structures which is gradually
reducing the dependence of most SMEs on bank loans, personal financing, family
and friends financing and all other traditional methods of financing businesses.
This study sought to analyse owners/managers views on the listing requirements
on the GAX, to analyse the current funding sources to SMEs as well as to assess
the readiness of SMEs to get listed on the GAX. The study adopted a cross
sectional design to survey 327 SMEs out of the population by using the Krejcie &
Morgan (1970) sample size determination table. The study concluded that SME
willingness to list on the GAX is low despite their willingness to share
information with the general public and their understanding of the operations of
the GSE-GAX. There are now new and alternative sources of financing across the
world which include capital market financing for SMEs; in which countries have
establish a new market for SMEs with less stringent listing requirements to list
either debt or equity instruments.
