Assessment of Supply-Side Financing of Lower-End Market SMEs by Rural Banks in Ghana

Abstract

This study examined the extent of application of financing requirements of rural banks for lower-end SMEs in Ghana, using exploratory qualitative approach and structured face-to-face interview. The study reveals that the requirement from lower-end SMEs by rural banks is similar to those in the commercial banks and upper-end SME market. Furthermore, they are found to be more stringent because of the higher risk associated with the operations at that level. The authors recommend the setting up of special schemes in association with government to support SMEs in times of default.

Keywords: Supply-Side, Rural Bank, Financing, Ghana, SMEs, Lower-End-Market

Contribution/ Originality: This study adds to the limited available evidence concerning the importance of various supply-side issues of lower-end SMEs’ access to external funding from Rural Banks.