Abstract:
This study discusses the impact of Microfinance Institution (MFIs) on the growth of Small and Medium Scale Enterprises (SMEs) in the Kumasi Metropolis. The study examined the detailed profile of SMEs in the Kumasi Metropolis of Ghana, the contribution of MFIs to entrepreneurial growth, the challenges encountered by SMEs in accessing credit and the rate of credit utilization by SMEs. An analysis of the profile of SMEs shows that most SMEs area their Micro stages since they employ less than six people and these ctoris considerably dominated by the commerce sub-sector. There search also indicates that MFIs have had a positive effect on the growth of SMEs. Some of the critical contributions of MFIs include; greater access to credit, savings enhancement and provision of business, financial and managerial training.
Description:
Ghana is said to have a relatively long history of government initiatives to promote and finance, small and medium enterprises (SMEs). The contributions these SMEs make to the economic development and growth of Ghana are substantial because so many people are employed by these enterprises. This is so because it is accepted worldwide that the development and growth of SMEs can play an important role in turning the growing unemployment situation around. In the light of foregoing, policies and programmes that would support the development of SMEs are formulated and implemented to better the lives of the citizenry. According to Mbuta and Nkandela (1998), the importance of SMEs in contributing to job creation and output growth is now widely accepted in both developed and developing countries. Of particular interest is the process of expansion of these enterprises from micro or small into medium size, as it is when they become medium-sized that growth-oriented SMEs make their most tangible contribution to economic growth and job creation.
