TITLE

Small Business Reliance on Bank Financing in Ghana

AUTHOR(S)
Abor, Joshua; Biekpe, Nicholas
PUB. DATE
July 2007
SOURCE
Emerging Markets Finance & Trade;Jul2007, Vol. 43 Issue 4, p93
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Financing has been identified as a dominant constraint to Ghanaian small and medium-sized enterprises (SMEs). This study explores the determinants of bank financing and debt among Ghanaian SMEs. A panel regression model estimates the relation between the determinants and the bank-debt ratio. The results reveal that bank loans account for less than a quarter of SMEs' total debt financing, and show that the age and size of the firm, along with asset tangibility, have significantly positive associations with the bank-debt ratio. Profitability is significantly and negatively related to the bank-debt ratio. These findings have significant implications both at the firm level and for the support of policies aimed at improving SME financing in Ghana.
ACCESSION #
26452320

 

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