Ed social sciences a thesis submitted to institute of distance learning, kwame nkrumah university of science and technology in partial fulfillment of the requirements for the degree of commonwealth executive masters of business administration institute of distance learning. The challenges of adopting and implementing ifrs for smes. Overview of challenges and opportunities in the sme sector in ghana habiba sumani national board for small scale industries nbssi. Fatoki and garwe 2010 state that in the south african context, new smes do not. Financial challenges facing urban smes under financial sector liberalization in ghana. The growth of smes is also important for the world. Some are perennial and others are particularly relevant to ukbased businesses because of the recent political turbulence. Conclusively, the study established that subsequent adoption of mobile money services has an influence on the performance of smes. Smes in ghana have a lot of difficulties when accessing funds from financial institutions. Sme is an engine of social and economic development in africa. Assessment of challenges facing small and medium enterprises. Smes in ghana provide about 85% of manufacturing employment and are believed to contribute about 70% to ghanas gdp frimpong, 20. 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. Globalization, increased competitive pressure and rapid technological changes have brought the business world to a point in history and thus, the small and medium enterprise smes sector in africa and ghana are the hardest hit and are now experiencing new challenges as they attempt to globalize their operations and become competitive.
It is against this background that it becomes pertinent to discuss the issues, challenges and prospects of small and medium scale enterprises smes in portharcourt city. Overview of sme ecosystem in ghana challenges confronting smes in ghana opportunities for sme development in ghana reflections. Drivers and challenges of ict adoption by smes in accra. The focus of this study is to examine the challenges affecting the growth and development of the small and medium enterprise sector of the ghanaian economy. From evidence to action small and mediumsized enterprises are engines of growth and job creation in developing countries, particularly in ghana today. It investigates the effects and challenges of mfis on the development of smes in rural ghana.
The motivation for this study is the persistent lack of access to credit facing all firms in general and smes in particular. Establishing the factors affecting the growth of small and mediumsized enterprises in. Financing challenges faced by smes in ghana subject financial accounting type of the degree master of science economics and business administration time of publication april 2019 number of pages 63 the major aim of this study was to explore financing challenges facing smes in ghana. Financing challenges faced by smes in ghana jultika. Obstacles of smes access to funds in nigeria have not been surmounted because of smes inability to generate and use quality accounting information richard, mcmahon and holmes, 1991. Africa is a foremost example in this regard as its entrepreneurs have to contend with some of the toughest conditions as compared to the rest of the world. The factors influencing sme failure in south africa.
Ed social sciences a thesis submitted to institute of distance learning, kwame nkrumah university of science and technology in partial fulfillment of the requirements for the degree of commonwealth executive masters of business administration institute of. Jamie macleod small and mediumsized enterprises smes are big business in ghana. Issues, challenges and prospects of small and medium scale. Challenges faced by smes in accessing credit in tamale. 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. Challenges affecting smes growth in ghana by andy asare. In addition to the above, smes are generally inexpensive to start and have the potential to generate massive economic growth in south africa. Financial challenges facing urban smes under financial. Contribution of smes to economic development in ghana pdf. The study examined the challenges of adopting and implementing international financial reporting standard ifrs among smes in the kumasi metropolis.
Appropriate office space appropriate support services. Based on this, it seems that research is needed to determine the causes of smes failure in namibia. Access to finance for smes african center for economic. The study enumerated these as smaller sizes of the smes. It is estimated that smes make up 70 % of ghana s gdp and 92 % of its businesses. E country report, the first of a series of publications assessing smes competitiveness. However, these smes are not without challenges, they are faced with problems including financial constraints, low capacity of personnel to mention but a few. In pursuit of this objective the other supporting objectives are. Sep 24, 2014 smes in ghana contribute massively on national gdp and employment in the manufacturing sector as stated above. The general objective of this research work is to access the challenges facing smes in accessing credit in the kumasi metropolis of the ashanti region of ghana. Challenges facing african entrepreneurs there are numerous barriers to entrepreneurship in developing countries. Challenges, opportunities, smes, growth, new juaben municipality, ghana. Innovation incentives and information gathering pdf. It is due to the challenges identified by the researchers that, some recommendations have been made to policy makers to help curb these problems so it can make the growth and smooth operation of smes a reality.
Objectives of the study this study aims to assess challenges facing small medium enterprises smes towards international marketing standards in arusha. Likewise, algerian smes face numerous and serious challenges to their growth. Objectives of the study the objectives of the study are. The literature shows that the desire for lower costs, improved productivity, higher product quality, higher customer satisfaction, and ability to focus on core areas are some of the key drivers of ict adoption. 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. 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. Key issues facing sme development in ghana challenges. The objective of this study was to establish the extent to. Smes are also believed to contribute about 70% to ghanas gdp and account for about 92% of businesses in ghana. Smes in terms of employee size, turnover andor total balance sheet european union 2003. Small and medium sized businesses across africa face many and varied challenges to their growth and operations. A study of financial accounting practices of small and. Nov 11, 2015 jamie macleod small and mediumsized enterprises smes are big business in ghana.
Carlos ahenkorah, deputy minster, ministry of trade and industry keynote address using. Unfortunately, smes today also face a number of barriers on their quest to growthfrom poor access to finance to low managerial. View the article pdf and any associated supplements and figures for a period of 48 hours. Having worked with over 400 businesses over the last 19 years, i believe ive gained a good perspective on the key challenges facing small and medium sized businesses smes today. A few of the challenges of smes in accessing loans are discussed below. Problems of financing smes in ghana munich personal repec. This will improve smes access to funds and improve the performance of the general level of economic activity. Small and mediumsized enterprises smes account for over 95% of firms and 60%70% of employment and generate a large share of new jobs in oecd economies. The theoretical framework of the study explained the various definitions of smes and how ghana as a country classifies smes. 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. Specifically, the study explored the extent of ifrs for smes adoption and implementation among smes and the challenges of ifrs for smes adoption and implementation among smes in the kumasi metropolis. The study will add to the literature on accounting practices of smes and therefore add to a body of knowledge. Textile, textile industry, small and medium enterprises smes. Smes are vital to achieving decent and productive employment as they globally account for two.
They have specific strengths and weaknesses that may require special policy responses. Smes play a major role in developing and developed economies in job creation and diversification of economic activities. It also explains the various challenges that hinders the development of smes in. Stringent conditions in many cases, smes are not able to access loans from financial institutions because of the conditions attached to the loan. The national board for small scale industries nbssi which is the regulatory body for smes in ghana defines smes in terms of both fixed asset and number of employees. Using a case study approach, both theoretical and empirical data were sourced to explore the role and impact of.
Development of sme in ghana september 2008 noted rather grimly, the obstacles these smes face daily in ghana. Challenges and opportunities of smes in the njm africa. It was with this in mind that this study was conducted to understand the extent of these challenges on smes in ghana. For an economy to live up to expectation in the committee of nations development, such economy must achieve accelerated economic growth and development which is a prerequisite for improving quality of life. Pdf drivers and challenges of ict adoption by smes in accra. Small and medium enterprises, financing, challenges, ghana. The situation of inadequate capital based on most smes in ghana to meet the collateral requirement of these credit institutions is a major constraint. In ghana, the major problem face by smes is access to credit boapeah, 1993. Incubation projects are designed to address the following challenges, which are particularly acute for ict enterprises.
Top 10 challenges facing small and medium sized businesses smes. The general objective of this study is to examine the challenges and determinants of access to bank credit in ghana by focusing on smes in the wa municipality. To analyse the challenges faced by savings and loans companies in lending credit to smes. Financial challenges of small and mediumsized enterprises. For instance, over 80% of smes in ghana are reportedly having.
Challenges affecting smes growth in ghana by andy asare ssrn. Mainly agrobased industries handicrafts services over 70% of registered companies are smes rgd highest percentage of women business owners46%. Characteristics of smes in ghana smes contribute about 70% to ghanasgdp and a provides employment for a large number of persons dominant sectors. 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. 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.
Despite their importance, there are significant barriers to growth of smes, including a lack. The paper is organized into the following sections, section 2 focus on the definition and development of sme s in ghana, section 3 focus on the sme s and economic development. Dec 05, 2017 challenges facing african entrepreneurs there are numerous barriers to entrepreneurship in developing countries. To discover the causes of small and medium enterprise failures in windhoek, namibia. Africa is a foremost example in this regard as its entrepreneurs have to contend with some of the toughest conditions as compared to. Pdf drivers and challenges of ict adoption by smes in. Mobile money services, performance, smes, eco cash, zimbabwe.
Despite the wideranging economic reforms instituted in the country to promote sme development, smes in ghana still face a variety of constraints uneca 2010, kayanula and quartey 2000. Basically the research focuses on sunyani municipality as the main area of study, but it will also cover the problems of smes for the other parts of the world under the same main purpose of this research. Smes, due to their size, are particularly constrained by noncompetitive real exchange rates, limited access to finance, cumbersome bureaucratic procedures in setting up, operating and growing a. Habiba sumani, director women entrepreneurship development, nbssi speech by sector ministry 9. The challenges of adopting and implementing ifrs for smes in. Pdf small and medium enterprises play an important role in the development of a country. The study examined factors that determine access to finance as well as challenges facing smes in their access to finance in ghana. Small and mediumsized enterprises smes access to credit. Top 10 challenges facing small and medium sized businesses. Characteristics of smes in ghana smes contribute about 70% to ghanasgdp and a.
According to the study, despite the fact that there are numerous challenges affecting this sector. Overview of barriers, challenges and opportunities in the sme sector in ghana ms. They also make up 91 % of formalized businesses in south africa and 70 % of the manufacturing sector in nigeria. Although the sme sector has many positive attributes, there are persisting challenges that plague south african smes. The textile industry in ghana was once a very vibrant industry. To determine alternative sources of finance for smes in the greater accra region of ghana. In nigeria for instance, an sme is defined based on the staff strength and the asset base of the organization. Establishing the factors affecting the growth of small and. The purpose of this study is to explore the key drivers and challenges of information and communication technologies icts adoption by small and medium sized enterprises smes in the accra metropolis of ghana. Overview of challenges and opportunities in the sme sector in. Prospects and challenges of smes in 21st century africa. Overview of challenges and opportunities in the sme sector.
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