Abstract:
Small and medium-scale enterprises (SMEs) are considered as the
heartbeat of every economy due to their immeasurable contributions to GDP as
well as employment (Aryeetey, 2001; and Abor and Adjasi, 2007). Despite all
these, they face myriad of challenges from capital inadequacy to technological
deficiency. This study, therefore, sought to identify the source(s) of funding
available to SMEs in Tema Metropolis, their performance and prospects as well
as the challenges and coping strategies. The study employed the descriptive
survey design and administered questionnaire to 120 owners, managers and
employees within the metropolis. The business operators were largely satisfied
with their performance in terms of employment, customer base, sales,
cost/expenditure, profit and physical expansion. The main prospect indicators
included customer base, cost or expenditure reduction and increased sales and
firm growth. The main challenges facing businesses in the metropolis were as
follows: high taxes; Cedi depreciation; low demand/sales; high rent; high
interest/lending rates; theft/burglary; payment of high salaries and utility bills and
lack of technology. The coping strategies that firms adopted were bulk
purchasing, judicious use of input material, bargaining on input prices and
employees‟ salary negotiation. Timely intervention by Government and other
stakeholders, through: reducing taxes, interest rates, rental cost and utility bills;
ensuring stable exchange rate regime; and improvement of research and
development, among others, is needed to avert the possible collapse of many of
these businesses.
