Aug 11, 2016 british high commissioner to ghana jon benjamin delivered a speech at the small and medium enterprise ghana awards smega. Small and mediumsized enterprises smes are big business in ghana. Smes have over the years been very significant to the economic development of most developing countries, especially ghana. Japan has the highest proportion of smes among the industrialised. For example, the ghanaian definition allows support to all but 127 firms in the country. Incremental innovation has been recognised as a key factor to smes survival and growth. Chosniel elikem ocloo department of marketing, accra polytechnic p. Pdf one of the greatest problems that have come so far as revenue generation is that of tax evasion. Abstractwe examine the role of a typical set of determinants of loan repayment performance of smes in the context of a rural banks setting in ghana. Combining the resources of the firms involved in a joint venture most often leads. The study focused on characteristics of the ownersmanagers of smes and features of those smes that influence their demand and access to credit in ghana. In the new economy, small and medium sized enterprises smes play a critical role. Pdf on jan 1, 2016, abraham ansong and others published firm reputation and financial performance of smes. Small and mediumsized enterprises smes access to credit.
However, access to finance is a key constraint to sme growth, it is the second most cited obstacle facing smes to grow their businesses in emerging markets and developing countries. Organisation for economic cooperation and development pursuant to article 1 of the convention signed in paris on 14th december 1960, and which came into force on 30th september 1961, the organisation for economic cooperation and development oecd shall promote policies designed. It is in view of this that this study seeks to explore the challenges of smes in accessing debts finance in the ghanaian financial market and to. Sep 24, 2014 smes in ghana contribute massively on national gdp and employment in the manufacturing sector as stated above. Smes are the core or basis for the future of developing countries as well as developed countries in creating jobs and competitiveness. Over the years, small and medium scale enterprises smes have been an avenue of job creation and the empowerment of nigerian citizens, providing about 50% of all jobs in nigeria and also for local capital formation. Sadly, stanbic banks inability to reach many smes with credit facilities is attributed to some challenges. This study is on the effects of multiple taxation on the performance of small and medium scale enterprises smes. European journal of accounting auditing and finance research.
Financial management practices and performance of smes in. And that within the private sector, smes are central to that endeavour. This paper discusses the characteristics, contributions of smes to economic development, and the constraints to sme development in developing countries with particular reference to ghana and south africa. Selection was based on the fact that it has a number of industrial units. As in the case of europe, those enterprises which employ less than 250 employees, the socalled smes, have been the main source of employment growth within the nonfinancial sector in the european economy. Smes in ghana have been noted to provide about 85% of manufacturing employment of ghana. Best practice management implementation and its effects on. Introduction algeria is a developing country characterized by a minimally diversified economic structure. A few of the challenges of smes in accessing loans are discussed below. List of best small business in accra, ghana, top small business in accra, ghana, small business near me, best small business. Small business in accra, ghana list of small business ghana. Smes in ghana have also been noted to provide about 85 per cent of manufacturing employment, contribute about 70 per cent to ghanas gdp, and therefore have catalytic impacts on economic growth, income and employment.
Small and medium enterprises smes in nigeria have not performed creditably well and hence have not played the expected vital and vibrant role in the economic growth and development of nigeria. The nature of international markets and the challenges with respect to the competitiveness of small and mediumsized enterprises smes makes it imperative to examine government support. Sme relief foundation is an ngo based in ghana west africa providing support to sme entrepreneurs through programs and resources such as business incubators. One of the greatest problems that have come so far as revenue generation is that of tax evasion. In ghana, the major problem face by smes is access to credit boapeah, 1993. The association of ghana industries is pushing for the mergers among small and medium enterprises in a bid to make the countrys industrial sector more efficient. The results show that quoted firms exhibit higher debt ratios than those of smes. The study examined factors that determine access to finance as well as challenges facing smes in their access to finance in ghana. Sme that are larger than micro companies, and either part of or heading towards the formal economy. Smes, by number, dominate the world business stage.
To achieve the highest sustainable economic growth and employment and a rising standard of living in. Valley view university, accra, ghana abstract this study examined the institutional framework for promoting small and mediumscale enterprises in ghana from the perspectives of smes. The chief executive officer ceo of national entrepreneurs and innovation programme neips, mr john kumah, yesterday advised small and medium enterprises smes to partner other businesses with similar ideas to enable them to build on each others strength. Keywords research, entrepreneurial development, smes, synonymous 1. In ghana, this failure did not discourage government from initiating other policies that were in line with smes support and development, because andah 2005 points out that the support for smes in ghana was even intensified in 1990s following the establishment of the national board for small scale industries nbssi. Bolgatanga polytechnic, school of business and management studies, upper east region. European journal of accounting auditing and finance research vol. Jamie macleod small and mediumsized enterprises smes are big business in ghana. Issues, challenges and prospects of small and medium scale.
In ghana small businesses make up the largest portion of the. D managing consultant sem international associates limited accra, ghana. Many ghanaians especially traders and smes willfully or deliberately refuse to honour their tax. It also explains the various challenges that hinders the development of smes in ghana, the contributions made to the economy of ghana by the small and medium enterprises smes and the available sources of finance to the. Third, we identify the most important obstacles to sme growth in subsaharan africa. For example, in australia smes represent 97 percent of all private sector businesses and provide 49 percent of all private sector employment australian bureau of statistics, 2002. This study therefore sets out to investigate the role of women in the ghanaian economy especially their participation in economic activities, to identify factors that hinder their development, to shed light on how women affect and are affected by policies, programs and projects that are instituted by the government. Smes operators and provision of tax incentives for smes operators. As per statistics from the united nations economic commission for africa 2010, ghanas gdp grew at an annual rate of 5. But, in rare cases, the business is purchased or formed out of a merger.
Furthermore, the study defined competency as managerial capacity to blend tangible. Financing challenges faced by smes in ghana jultika. The study presented in this paper analyzes the factors influencing the growth rate of small and mediumsized enterprises smes in algeria and explores the extent to which their success or failure depends on the wider business climate. Combining small and large firm advantages in innovation. They are often described as efficient and prolific job creators, the seeds of big businesses and the fuel of national economic engines. Growing the global economy through smes edinburgh group. According to the study, despite the fact that there are numerous challenges affecting this sector. Stanbic bank ghana limited and other banks are irrefutably committed to supporting smes financially. Stringent conditions in many cases, smes are not able to access loans from financial institutions because of the conditions attached to the loan. The sme sector contributes over 70% of the countrys gdp according to villars 2004. Institutional framework for promoting small and medium scale.
Chapter three compares the capital structures of large, quoted firms and smes in ghana. Microfinance has become an important component of smes activities in ghana. Due to the nature of ghanas economy it is difficult to quantify just how important they are, but estimates suggest 70% of all gdp contributions come from such enterprises. Further, a majority of womenowned smes are in the retail and wholesale sector about 40 percent.
Red tape, corruption, complex entry regulations etc. Smes form the focus of any economy green, 2003 cited in blossom c. Establishing the factors affecting the growth of small and. Access to finance for smes by the world bank, ghana office this paper has been jointly produce by acet and world bank, and sponsored by the acet way. Although precise, uptodate data are difficult to obtain, estimates suggest that more than 95% of enterprises across the world are smes, accounting for approximately 60% of private sector employment ayyagari et al. University of ghana joshua abor university of ghana this study explores the eaccounting practices among smes in ghana. They are also believed to contribute about 70% to ghanas gdp and account for. The first measures the share of the sme labor force in the total labor. It is estimated that smes make up 70 % of ghana s gdp and 92 % of its businesses. The following companies did not match exactly but may also be of interest to you. Measuring performance in small and medium scale enterprises. Publishers pdf, also known as version of record publication date. Challenges of small and medium enterprises smes in accra, ghana mr.
As a matter of fact, it has been recorded that over 90% the businesses in ghana come in the. Data on export dynamics show that mediumsized firms export more quickly than small firms. Is small and medium enterprises smes an entrepreneurship. A small to midsize enterprise sme is a business that maintains revenues, assets, or number of employees below a certain level.
Financing small and medium enterprises smes in ghana. For example, in the european union eu a business with fewer than 250 employees is considered an sme, while in the united states an sme has fewer than 500 employees. Selorm akaba department of agriculture extension and economics university of cape coast, ghana mr. After a study of how the adoption of corporate governance structures affects the performance of smes small to medium. This will be followed by definitions and basic concepts, the role and characteristics of smes and constraints to sme development in the two countries. Such impressive performance was partly contributed to the robust growth of the sme sector in ghana. The study used quantitative data from smes in ghana, and the. In the developed economies such as germany and the united kingdom small businesses are recognized as the main engines for growth and development. Algeria, business climate, business environment, external factors, growth, internal factors, small and mediumsized enterprises smes 1. The experiences of successful small business owners in ghana. Eaccounting practices among small and medium enterprises. A major barrier to rapid development of the sme sector is a shortage of both debt and equity financing. The moderating role of firm age 9 open journal of economics and commercev1 14 2018 over the world.
There has been a worldwide dramatic development in information and communication technology ict over the years. Applicability of theory of constraint in predicting ghanaian smes. Effects of multiple taxation on the performance of small. Ghana, was undertaken to highlight the issues facing smes in ghana in their. Scenic hwy babson park, fl usa michael asare appiah takoradi technical univeristy takoradi evelyn owusu frempong christian service university college p. Ghanaian smes, logit model, oil and gas, perceived investment constraints. Request pdf financing small and medium enterprises smes in ghana issues of. Due to the nature of ghana s economy it is difficult to quantify just how important they are, but estimates suggest 70% of all gdp contributions come from such enterprises. The study used a firmlevel survey of 720 firms which was conducted by the world bank in ghana in 20. The theoretical framework of the study explained the various definitions of smes and how ghana as a country classifies smes.
The research design is based on a survey methodology using a sample of systematically selected smes throughout the country. Globally, the contribution of small and medium enterprises smes to the growth of national economies is significant. Best practice management implementation and its effects on the growth of smes in ghana fred appiah fening webber international university 1201 n. Smes has hampered crosscountry analyses of smes, growth, and poverty. In ghana, the association of ghana industries agi stated that lack of adequate access to credit is the leading factor stifling the growth of small businesses in ghana. An empirical perspective of smes in the cape coast metropolis, ghana moses ahomka yeboah, cape coast polytechnic, ghana the high failure rate of small and medium enterprises smes in ghana is alarming, despite copious government policy and stimulus schemes directed at smes. Key issues facing sme development in ghana challenges.
In the region, smes are severely hampered by a weakly developed business environment. Of the total number of smes in developing countries, womenowned smes account for 30 to 37 percent, or about 8 to10 million smes within size class, women own smaller enterprises, and about 20 percent of mediumsized enterprises. In ghana, many of the smes tend to operate in the informal sector in which workers are either selfemployed or work for others who are selfemployed mantey, 2015. Financial management practices and performance of smes in ghana. Effect of legal and regulatory framework on smes growth in. Bureaucracy, unstable policy climate, unfriendly customs and trade regulations, tight monetary and credit policies, corruption, and excessive tax regimes, workforce and labour regulations were found to negatively affect smes growth in ghana. Qualitative study on innovation in manufacturing small and medium sized enterprises smes. Financial management practices, asset management, ordinary least square, firms age, smes, ghana. An assessment of financial records keeping behaviour of. Corporate governance practice among small and medium scale. Public disclosure authorized and employment effects. Sme is an engine of social and economic development in africa. Findings confirmed the existence of formal institutions that support smes in ghana.
Unfortunately, smes today also face a number of barriers on their quest to growthfrom poor access to finance to low managerial. Munich personal repec archive the development of smes in turkey nurrachmi, rininta nurrachmi and abd samad, khairunnisa and foughali, ibrahim international islamic university malaysia november 2012 online at mpra paper no. The motivation for this study is the persistent lack of access to credit facing all firms in general and smes in particular. Determinants of loan repayment performance of small and. Mr owusuagyeman made the appeal on wednesday in accra at the third edition of the graphic business. This study analyses survey results on the effect of mobile money services on the growth of smes in ghana, using smes in the tarkwa nsuaem municipality as a case study. The criteria for determining an sme varies among countries and industries. Small and medium scale enterprises, sme operators, portharcourt city, nigeria. It is concluded that for smes growth to thrive, sound legal and regulatory systems are needed. Introduction small and medium scale enterprises smes are generally regarded as the engine of economic growth and equitable development in developing economies. This study aims to assess the role and effectiveness of government and the export promotion agencies in supporting exports by nontraditional horticultural smes in ghana. Pdf firm reputation and financial performance of smes.
Kessey kwame nkrumah university of science and technology, ghana abstract smes in developing countries play significant role in the economic activities of those nations. Challenges affecting smes growth in ghana by andy asare ssrn. At the inclusive agribusiness centre, we support startups and smes within the agricultural value chain in ghana with business development advic. This situation has been of great concern to the government, citizenry, operators, practitioners and the. The study also looks at the expectations, realities and barriers in adopting eaccounting. However, smes in ghana especially rural areas have been challenged by access to finance which happens to be the major impediment to smes development carpenter, 2001. According to waari and mwangi 2015, these challenges are faced by both the banks and the smes in ghana. This study also examines different internal factors that may be responsible for the unstable and. An assessment of financial records keeping behaviour of small scale businesses in ghana. With about 92% of businesses in ghana being smes, quartey and abor 2010 reiterate smes contribution to ghana. Pdf small and medium enterprises play an important role in the development of a country. Overview of small and medium enterprise financing in some. According to the oslo manual 2005, marketing innovations are the changes.
The smes constitute about 90% of total business units in ghana and account of 60% of ghanas employed labour force kdi, 2008. This paper provides the first crosscountry evidence on the links between smes and economic growth and poverty alleviation using a newly built database on smes. From evidence to action small and mediumsized enterprises are engines of growth and job creation in developing countries, particularly in ghana today. They also make up 91 % of formalized businesses in south africa and 70 % of the manufacturing sector in nigeria. Pdf issues in sme development in ghana and south africa. We then proceeded by refining the list to delete and combine certain. It leads to the creation of employments, manufacturing of locally made goods and services for export, and helps the local government to generate tax revenues for national socioeconomic development. Contribution of smes to economic development in ghana pdf. Our analysis using survey data suggests that, while higher application cost, loan size and interest rate exert significantly negative influence on loan repayment, higher educational background of the sme operators is associated with. Small and medium enterprises smes in ghana are said to be a characteristic feature of the production landscape and have been noted to provide about 85% of manufacturing employment. Charles yeboah frimpong member, ica ghana who is the executive director of frimbiz africa, an organisation whose mission is to harness the numerous potentials of smes and increasing their capacity in social and economic development.
807 1139 918 428 106 1208 1181 1611 557 166 1138 387 1592 115 19 1085 277 1666 1498 315 269 1054 1400 420 1389 1538 119 427 1256 763 1071 1273 1449 423 498 1324 212 381 401 571 225 435 942 66