Performance and Constraints of Small Scale Enterprises in the Accra Metropolitan Area of Ghana

Abstract

Small Scale Enterprises play a crucial role in the development of entrepreneurial capabilities and indigenous technology which generate employment. Promotion of such enterprises in developing economies like Ghana is of paramount importance as it brings about a great distribution of benefits. The study seeks to quantify the determinants of the factors influencing performance of small scale enterprises in Accra Metropolitan Area of Ghana. Kendall’s coefficient of concordance was used to test the agreement between the ranked constraints of the small scale enterprises in relation to performance. The study uses structured questionnaire to interview 150 small scale entrepreneurs in Accra Metropolitan Area (AMA). Data collected was analyzed using Statistical Package for Social Science (SPSS) and Econometric views (E-views). Results of the analysis indicate that age of entrepreneur is the most influential determinant of performance of small scale enterprises. The Kendall’s coefficient of concordance indicates that there is 91 percent agreement between the respondents in the ranking of the constraints in relation to performance. High cost of borrowing is the most important constraint faced by the small scale entrepreneurs. Based on the results, we recommend a flexible policy geared towards helping young entrepreneurs, as well as reducing the high interest charges on loans.

Key words: Performance, Constraint, Small Scale Enterprise, Accra Metropolitan Area, Ghana