Limited access to finance remains a dominant constraint to small scale enterprises in Ghana.
Credit constraints pertaining to working capital and raw materials are often cited by small firm and these partly stem from the fact that SMEs have limited access to capital markets, both locally and internationally. SMEs have difficulties in gaining access to appropriate technologies and information on available techniques. This fact is ascertained by UNCTAD 2005 which notes that most SMEs also lack the technical know-how and financial resources needed to acquire state of the art technologies and equipment required to improve productivity and to become internationally competitive. Regulatory Constraints: Although wide ranging structural reforms have improved, prospects for enterprise development remain to be addressed at the firm-level.
As indicated by OECD 2002, SMEs fast-changing technologies and globalising economies are putting increased pressures on firms to reorganise their structures to enhance adaptability and flexibility.
Upgrading the skills of all types of employees is hence central to firm performance in SMEs which must be able to adapt quickly to evolving markets and changing circumstances, but which often have limited resources.
Indeed there is preliminary evidence that competence development activities can reduce the failure rates of small firms, which are far more likely to fail than larger firms, particularly in the early years (OECD 2002).
1.2 SMEs in Ghana: Definition and Role towards Economic Development As per statistics from the United Nations Economic Commission for Africa 2010, Ghana’s GDP grew at an annual rate of 5.4 per cent between 20.
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From these definitions however, it would be prudent for purposes of this essay to note that the process of valuing fixed assets in itself poses a problem as continuous depreciation in the exchange rate often makes such definitions out-dated.
It is further noted that SMEs in Ghana can be categorised into urban and rural enterprises.