Determinants and Constraints of Agro-based SMEs Access to Finance: Evidence from Ghana


Kwame Obiri Yeboah, Nicholas Oppong Mensah, Isaac Tandoh, Kwame Assare Duffour, Nana Jesse Telfa Roberts


This study explored the determinants and constraints of the access to finance of Agro Based SMEs in the Cape Coast Metropolis, Ghana. The research utilized primary data using a structured questionnaire. Sixty (60) SMEs in the Metropolis were selected using the simple random sampling technique. To ensure data reliability and validity, a pilot test was conducted for confirmation. Results show that Agro-based SMEs prefer personal savings as the first means of finance. Also, collateral, owner’s gender, sector of business, availability of audited financial statements, firm’s performance and firm size are the determinants of Agro-based SME’s access to financing. The major challenges faced by Agro-based SMEs in financing their businesses result conclude a lack of the expertise to prepare sophisticated financial statements, less repayment period, unclear financial plans to execute business, non-availability of enough MFIs and bureaucracy. It is recommended that Agro-based SMEs should cultivate the habit of savings personally to serve as the basis for their working capital so as to reduce over-reliance on banks and microfinance institutions. Additionally, Government interventions like MASLOC must be enhanced to allow more SME owners in SME businesses to access financing.

Suggested Citation (APA 7th)

Yeboah, K., Mensah, N., Tandoh, I., Duffour, K., Roberts, N. (2023). Determinants and Constraints of Agro-based SMEs Access to Finance: Evidence from Ghana. International Journal of Applied Research in Business and Management, 4(1), 211-232.

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