ABSTRACT This research study investigates the effect of Microfinance Institutions on the growth of Small Scale and Medium Scale Enterprises at Capital Rural Bank, Sunyani. The objectives of the study were to determine the products and services offered by MFI, to examine the contribution of MFI on the growth of …
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ABSTRACT This research study investigates the effect of Microfinance Institutions on the growth of Small Scale and Medium Scale Enterprises at Capital Rural Bank, Sunyani. The objectives of the study were to determine the products and services offered by MFI, to examine the contribution of MFI on the growth of SMEs and challenges confronting SME development. The sample size involving 200 clients were used. The researcher used questionnaires as an instrument of primary data collection. The researcher used cross-sectional survey to collect the data. Four different hypotheses were formulated and tested using paired sampled T-Test and Eta squared. Paired sample T-test and Eta squared were used to measure the effect of MFIs on growth in assets, number of employees, capital base and revenue. The findings of the study revealed that product and services provided by MFI has helped SMEs grow. Some products offered by the bank included loans, business advice, insurance and savings and services the MFIs offered were skills development, business advice health and technological assistance. The study confirms there were positive effects of MFIs towards promoting SMEs growth in assets, number of employees, capital base and revenue. The challenges confronting SMEs development were high interest rate, lack of collateral and lengthy application process that hinders the growth of SMEs. It was recommended that MFI Institutions should organise training programmes in records keeping, credit management, marketing and management seminar. The institutions should provide insurance products. Microfinance institutions should endeavour to provide more products and service beyond credit. Major limitations were the problem of answering questionnaires by SMEs and the corporation of SMEs.TABLE OF CONTENTSTITLE PAGEDECLARATIONABSTRACTACKNOWLEDGEMENTDEDICATIONTABLE OF CONTENTSLIST OF TABLESLIST OF FIGURESLIST OF ABBREVIATIONS CHAPTER ONEBACKGROUND TO THE STUDYIntroductionProblem StatementResearch PurposeObjectives of the StudyResearch QuestionsHypothesesSignificance of the studyScope and DelimitationsLimitations to the studyDefinition of TermsOrganization of the chapters CHAPTER TWOLITERATURE REVIEWIntroductionThe concept of microfinance/MicrocreditEvolution of Microfinance in GhanaTypes of Microfinance Institutions in GhanaMicrofinance Institutions (MFIs)Microfinance products and services for SMEs developmentMicrofinance Credit ModelsIndividual creditVillage Banking ModelCredit UnionsSME’s Access to FinanceSME’s growth and developmentChallenges confronting SMEs FinancingConceptual Framework CHAPTER THREEMETHODOLOGYIntroductionStudy DesignBackground of the Study AreaStudy PopulationSample Size and Sampling TechniqueStudy TypeStudy VariableSources and method of Data CollectionData Collection InstrumentData Collection ProcedureEthical Considerations CHAPTER FOURRESULTS AND DISCUSSIONIntroductionPresentation of ResultsSocio-demographic characteristics of respondentsTable 4.1: Socio-demographic characteristics of respondentsProduct and services offered by MFIThe effect of MFI to the growth of SME’sPaired Sample T-Test on the effect of the MFI on SMEsChallenges confronting SME’sDiscussion of results CHAPTER FIVESUMMARY, CONCLUSION AND RECOMMENDATIONIntroductionSummaryConclusionRecommendations REFERENCESQUESTIONNAIRE FOR CUSTOMERS
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