Thesis On Small-Scale Enterprises

Thesis On Small-Scale Enterprises-21
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.

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Mensah 2004 drew up a basic profile on such SME challenges: SMEs are dominated by the owner/manager who takes all major company decisions.

The entrepreneur possesses limited formal education, access to and use of new technologies, market information, and access to credit from the banking sector is severely limited.

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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You can view samples of our professional work here.They also improve the efficiency of domestic markets and make productive use of scarce resources and thus facilitating long term economic growth.1.3 Challenges facing SME Growth and Competitiveness in Ghana Despite the wide-ranging economic reforms instituted in the country to promote SME development, SMEs in Ghana still face a variety of constraints (UNECA 2010, Kayanula and Quartey 2000).This target group has been identified as the catalyst for the economic growth of the country as they are a major source of income and employment.Analogous to the situation in other countries though, Kayanula and Quartey 2000 state that there is no single, uniformly acceptable, definition of a small firm in Ghana as these firms differ in their levels of capitalisation, sales and employment.The authors further point out that SMEs have been recognised as a seed-bed for indigenous entrepreneurship, are labour intensive, employing more labour per unit of capital than large enterprises and promote indigenous technological know-how.Furthermore, due to their regional dispersion and their labour intensity, argument goes that small scale production units can promote a more equitable distribution of income than large firms in Ghana.While it is generally accepted that SMEs are important contributors to the domestic economy, not many governments have framed policies to enhance their contribution or increase their competitiveness (UNCTAD 2005).Previously insulated from international competition, many SMEs are now faced with greater external competition and the need to expand market share.By using our site, you agree to our collection of information through the use of cookies. Disclaimer: This work has been submitted by a student.

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