Access to Credit: Experiences of Petty Traders in Ghana
Access to finance is a key determinant for business start-up, development and growth for small businesses. This paper focused on the experiences of petty traders in accessing credit within Wa Central in the Upper West Region of Ghana with a sample of eighty-one respondents for both the questionnaire and the interview. The data collected was analysed using descriptive statistics, Pearson correlation matrix and Kendall’s coefficient of concordance. Result revealed that in acquiring credit from the financial institutions they demanded for security for the credit requested, though the petty traders were given sufficient time for repayment they indicated that the financial institutions failed to do effective monitoring and supervision of the usage of the credit given. The study showed evidence that high interest rate charged and poor records keeping by petty traders were the challenges of accessing loans. The Branch Manager during the interview revealed that giving credit to petty traders is a challenge but they do it as part of their social responsibility to help eradicate poverty among the small income earners and help grow and expand small businesses in the geographical area. The paper suggests that petty traders must keep proper records, the need for financial institutions to reconsider its stringent eligibility criteria for petty traders, finally policy makers must create an enabling operating environment for micro enterprises to flourish.
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Department of Accounting, Banking and Finance, Garden City University College, Kumasi, Ghana.