Abstract:
The purpose of the study was to investigate credit risk management and pricing
strategies of Micro and Small Enterprises (MSEs), and their influence on the
enterprises’ performance at Cape Coast Metropolis (CCM). The descriptive
survey design was adopted for the study. A sample size of 179 was used for the
study. The snowball sampling technique was used to select the 179 respondents
who were made up of owners/managers and account/finance staff of the various
MSEs in the metropolis. The instrument used in collecting data was
questionnaire. The data were analysed using both descriptive and inferential
statistics. The study revealed that owners/managers and account/finance staff of
the various MSEs in CCM view credit risk management and pricing strategies
of their enterprises in positive terms. Also, credit risk management and pricing
strategies have a significant influence on MSEs’ performance in the long run.
However, pricing strategies influence MSEs’ performance more than credit risk
management strategies. Based on the findings, the study recommends that the
supervision and management of credit risk in MSEs should not be vested on
only the owners/managers but rather a three-member committee should be
formed to take care of that. Also, MSEs should put in place effective measures
to assess the most effective pricing strategy in order to reduce product costs and
thus increase performance whenever such a strategy is used. They should also
adopt ways to implement their pricing strategies better compared to competitor
MSEs.
