Abstract:
Our paper examined the effects of firm reputation on access to
external funding among small and medium-sized enterprises (SMEs) in Ghana
by controlling for firm specific variables such as firm size, firm performance,
leverage and managerial competence. It contributes to our knowledge on how
firm reputation, especially organisation identity, assists firms in accessing
external funding. We analyzed primary data of 423 SMEs registered in the
Accra Metropolis of Ghana using regression analysis. Even though, we
documented positive relationship between firm reputation and access to
finance, only firm image was significant. This denotes that firm reputation
could assist SMEs in accessing external financing if SME managers develop
and improve their information and communication practices to highlight
tangible evidences of firm success. This could be achieved by keeping proper
books of accounts on firm operations, which could reduce lenders’ perception
of risk and thus, facilitate easier access to external funding.
