Effect of Infrastructure and Credit Facilities on Performance of SMEs for Business Development. A case Study of SMEs in Cape Coast

Abstract

This study seeks to assess the effect of infrastructure and credit facilities on performance of SMEs for business development in Cape Coast. The principal objective of this study is to examine the effects of infrastructure and credit facilities on the performance of SME’s: A case study of SMEs in Cape Coast. The specific objectives of the study are to: identify constraints to infrastructural development, identify constraints to credit facilities and examine both the effect of infrastructure and credit facilities on the performance of SME’s in Cape Coast. The study uses descriptive survey and simple random to select 126 SME’s from the total population of 190. Primary data was collected with the use of questionnaires. Statistical Package for Social Sciences version (22.0) is used for data entry. Both descriptive such as frequency and percentages and inferential statistics such as multiple regression analyses has been used. As such, specific objectives have been addressed and assessed. The results of the study indicated that, infrastructure development and credit facilities jointly explained about 68.2% of the SMEs performance in Cape Coast. The study also showed that the infrastructure and access to credit facilities have statistically significant positive effect on SME’s performance in Cape Coast. Findings of the study indicated that lack of collateral security to meet the eligible criteria of the credit facilities, frequent power outage, inadequate and unstable electricity supply, inadequate access to constant water supply as well as old infrastructure have hampered the performance of the SME’s in Cape Coast, and further found that the conditions of roads are not good for business to boost their performance; there are problems of telecommunication system and inadequate transportation systems affecting SME’s businesses performance in Cape Coast.