Perceptions of owners of small and medium scale enterprises on the Ghana alternative exchange: evidence from Accra Metropolis

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.