An Evaluation of the Awareness of Small and Medium Enterprise Financing Options: A Case Study of the Tema Metropolis

Abstract

Access to finance has been identified as a dominant constraint facing the Ghanaian Small and Medium Enterprises (SMEs) sector. Many sources of finance have been identified to be available to the SMEs. The purpose of this study was to determine the awareness of small and medium enterprise financing options to the entrepreneurs and the case study was the Tema Metropolis. Communities 1,2,4,5,7,8,9 and 25. A questionnaire was designed and used to collect data from ninety four (94) entrepreneurs. The respondents were selected using convenience, purposive and random sampling hence the questionnaire used to collect data from respondents was done using one-on-one interview. The data was analyzed using SPSS version 20 and statistical tools such as frequency counts, pie charts and bar charts were employed. The respondents’ ages were between18-50+ with 65 males and 29 females. The most significant finding of the study was that respondent had knowledge of the available equity and debt sources of finance, but most of them did not have knowledge of the hybrid source of finance. Respondents were only using a hand full of the sources of finance available which are personal savings, family and friends and partners as their equity source of finance and commercial banks, overdraft and microfinance as their debt source of finance, because they had much information about these sources of finance. Most of the respondents had challenges in accessing their source of finance. Based on the results obtained major recommendation proposed was the need for more education on the other sources of finance so that entrepreneurs will have a lot of sources to choose from.