Over the past decennary. Africa and other developing parts have been in the thick of enormous alterations. Market liberalisation and governmental decentalisation policies have interfaced with globalisation and urbanisation tendencies to dramatically transform societal. political. economic and cultural lives. In this context of rapid alteration. SME operations can no longer stay behind functioning merely to run into sustenance income for their proprietors. SMEs battles have to go a dynamic and built-in portion of the market economic system. The designation of factors that determine new venture public presentation such as endurance. growing or profitableness has been one of the most cardinal Fieldss of entrepreneurship research ( Sarasvathy. 2004 ) . A battalion of research documents has focused on researching assorted variables and their impact on public presentation ( Bamford et Al. . 2004 ) . However. in order to be able to analyse and pattern the public presentation of new ventures and SMEs. the complexness and dynamism they are confronting every bit good as the fact that they may non be a homogeneous group but significantly different in respect to many features ( Gartner et al. . 1989 ) have to be taken into history.
In line with the above. there have been disputing arguments all over the universe on the function played by Small and Medium Enterprises ( SMEs ) towards economic development. Therefore. a huge literature on the growing and public presentation of SMEs has been developed over the old ages. Small and Medium Enterprises ( SMEs ) have had a privileged intervention in the development literature. peculiarly over the last two decennaries. Barely any statements are put frontward against SMEs. even if development policies do non needfully favor them and economic plans. voluntarily or non. frequently continue to ensue in big capital investing. Arguments for SMEs come from about all corners of the development literature plans. peculiarly in the less developed states ( LDCs ) . be given to underscore the function of SMEs. even if practical consequences differ from the rhetoric. ( Carlos Nuno Castel-Branco. May. 2003 ) Therefore. SMEs seem to be an recognized wisdom within the development argument.
It is believed that growing in SMEs should hold a positive consequence on the life conditions of the people. their income degree. lodging. public-service corporations. Castel-Branco ( 2003 ) . in a survey. revealed that this is non ever true because countries where SMEs are executing so good attracts public attending and many rivals begin to parade into the country. This later leads to over congestion with its associated jobs of which adjustment is non an exclusion. The construction of SMEs in Ghana as possibly one of the chief engines of growing can be viewed as rural and urban endeavors. For urban endeavors. they can either be planned or unplanned. The planned-urban endeavors are characterized by paid employees with registered offices whereas unplanned-urban endeavors are largely confined to the place. unfastened infinite. temporal wooden constructions. and employment therein is household or learners oriented.
In the recent chase of economic advancement. Ghana as a developing state has by and large come to acknowledge that the SME sector may good be the chief drive force for growing. due to its entrepreneurial resources and employment chances. However. the bing efforts to research through empirical observation the functions played by SME in the economic development of a state are still slightly equivocal. This can be attributed. more or less. to the fact that when analyzing economic advancement per Se. economic experts have tended to disregard the industrial construction of the economic system and the impact this can hold on such development. The ambiguity of the function of SMEs has hence necessitated the demand for a survey to be conducted to entree the existent impact of the proliferation of SMEs on the dwellers of the Medina community.
1. 2 Problem Statement
The little concern sector is recognized as an built-in constituent of economic development and a important component in the attempt to raise states out of poorness ( Wolfenson. 2001 ) . The dynamic function of little and average endeavors ( SMEs ) in developing states as engines through which the growing aims of developing states can be achieved has long been recognized. The growing of little graduated table concerns in Ghana so rapid. that it is now seen as a day-to-day matter. Many Potential proprietors of SMEs move to countries where the feel they can win to put them up at that place. More so. many factors may lend to the motion of people to settle at certain geographical countries.
It is believed that the factors that influence migration include the demand for peaceable and violent free environment. the demand for fertile concern locations. the desire for privateness. authorities policy and a host of others. Specifically. with mention to the above. the Medina municipality of the Greater Accra part has experienced a noticeable growing and increase in the figure motions into the country and for that affair SMEs addition in the last few old ages. It is of import to advert that some research surveies have been conducted to find the existent impact of migrations on host societies. In line with the above. this survey sorts to measure the nature of SMEs in Medina with regard to the engagement of work forces and adult females. the chief beginnings financess for them. the chief aims and challenges faced by SMEs in Medina. grounds the detonation of SMEs in Medina and the scio-economic impacts of this growing of SMEs in Medina.
1. 3 Aims:
1. 3. 1 Main Objective
The chief aim of this survey is to measure the general impact of the plorefication of SMEs in Medina on the Medina municipality of the Greater Accra part.
1. 3. 2 Specific Aims
1. To measure the nature and signifiers of SMEs in Medina and the comparative engagement of adult females and work forces. 2. To place the chief aims and challenges of SMEs in Medina and to rank them in order of importance. 3. Measure the chief beginnings of capital for SMEs in Medina.
4. To measure the position of SMEs in Medina with respect to concern enrollment. nest eggs. record maintaining and concern history keeping. 5. To find the factors that account for the outgrowth of little graduated table concerns in the Medina community 6. To measure the socio-economic impacts of the growing of SMEs in Medina
1. 4 Research Questions
The survey shall supply replies to the undermentioned research inquiries: 1. What is the nature of SME operation in Medina and the comparative engagement of adult females and work forces? 2. What are the chief aims and challenges of SMEs in Medina and which are ranked more importance? 3. What are the chief beginnings of capital for SMEs in Medina?
4. What are the position of SMEs in Medina with respect to concern enrollment. nest eggs. record maintaining and concern history keeping? 5. What factors have accounted for the outgrowth of little graduated table concerns in the Medina community? 6. What are the socio-economic impacts of the growing of SMEs in Medina? 1. 5 Justification of the Study
It is hard to analyse the public presentation. nature of operation and behaviour of the SME sector in Ghana due to the deficiency of comprehensive informations on them and their activities. The sector is non classified into sub-sectors and the last industrial study was conducted in 1995 but covered merely average and large-scale industries. In regard of this. the justification of this survey rests on the fact that. survey will assist supply information on the nature of SMEs in Medina with regard to the engagement of work forces and adult females. the chief beginnings financess for them. the chief aims and challenges faced by SMEs in Medina. grounds the detonation of SMEs in Medina and the socio-economic impacts of this growing of SMEs in Medina.
Furthermore. the survey while provide critical information policy shapers of the Medina municipality and all other stakeholders of the Medina community. Finally the survey while green goods information to will add on to bing literature for farther surveies in this country. 1. 6 Scope and Restrictions of the Study
Due to clip and resource constrains. this survey is restricted peculiarly to the Medina community. The survey focuses on the factors that account for the growing of SMEs in Medina and the socio-economic impacts of this alteration on the people of Medina among others. The survey is limited in range because it fails to cover the full population of Ghana. The findings of this survey may therefore deficiency generalizability every bit far as other communities in Ghana are concern.
1. 7 Organization of the Study
Chapter 1 trades with the background of the survey. the job statement. aims of the survey. justification of the survey and organisation of the survey. Chapter 2 reappraisals both theoretical and empirical literatures on SMEs in general. in Ghana among others. Chapter 3 introduces the survey country and describes the methodological analysiss used to analyse the jobs stated. It includes the methods used for informations aggregation. and process for informations analysis. Chapter 4 is devoted to presentation and treatment of consequences. Drumhead statistics of the variables used in the survey are presented and discussed. Chapter 5 winds up this survey pulling decisions. their policy deductions. Suggestions for future research based on the findings are made.
Chapter TWO
2. 0 LITERATURE REVIEW
2. 1 Introduction
This chapter reviews plants on little and average endeavors in the universe. Africa and Ghana. The province of SMEs in Ghana is reviewed here. Besides. Works on public presentation and determiners of public presentation of SMEs are captured. Furthermore. a subdivision of this chapter assesses the assorted methods of mensurating public presentation of SMEs which while aid open up the apprehension of the province of SMEs in Medina. Finally. this chapter closes with some migration theories to assist ease the comprehension of the factors that really account for human migration. in this instance migration to Medina.
2. 2 Definitions and Concepts of SMEs
There is no individual. uniformly acceptable. definition of a little house ( Storey. 1994 ) . Firms differ in their degrees of capitalisation. gross revenues and employment. Hence. definitions that employ steps of size ( figure of employees. turnover. profitableness. net worth. etc. ) when applied to one sector could take to all houses being classified as little. while the same size definition when applied to a different sector could take to a different consequence. The first effort to get the better of this definition job was by the Bolton Committee ( 1971 ) when they formulated an “economic” and a “statistical” definition. Under the economic definition. a house is regarded as little if it meets the undermentioned three standards:
I. It has a comparatively little portion of their market topographic point ;
two. It is managed by proprietors or portion proprietors in a individualized manner. and non through the medium of a formalistic direction construction ; three. It is independent. in the sense of non organizing portion of a big endeavor. The Committee besides devised a “statistical” definition to be used in three chief countries: a. Quantifying the size of the little house sector and its part to GDP. employment. exports. etc. ; B. Comparing the extent to which the little house sector’s economic part has changed over clip ; c. Using the statistical definition in a cross-country comparing of the little firms’ economic part.
Therefore. the Bolton Committee employed different definitions of the little house to different sectors. 2. 2. 1 Criticism of the Bolton Committee’s “Economic” Definition of SMEs A figure of failings were identified with the Bolton Committee’s “economic” and `statistical’ definitions. First. the economic definition which states that a little concern is managed by its proprietors or portion proprietors in a individualized manner. and non through the medium of a formal direction construction. is incompatible with its statistical definition of little fabrication houses which could hold up to 200 employees. As steadfast size additions. proprietors no longer do chief determinations but devolve duty to a squad of directors.
For illustration. it is improbable for a house with 100 employees to be managed in a individualized manner. proposing that the `economic’ and `statistical’ definitions are incompatible. Another defect of the Bolton Committee’s economic definition is that it considers little houses to be runing in a absolutely competitory market. However. the thought of perfect competition may non use here ; many little houses occupy `niches’ and supply a extremely specialised service or merchandise in a geographically stray country and make non comprehend any clear competition ( Wynarczyk et al. 1993 ; Storey. 1994 ) . Alternatively. Wynarczyk et Al ( 1993 ) identified the features of the little house other than size. They argued that there are three ways of distinguishing between little and big houses. The little house has to cover with:
( a ) Uncertainty associated with being a monetary value taker ;
( B ) Limited client and merchandise base ;
( degree Celsius ) Uncertainty associated with greater diverseness of aims as compared with big houses. As Storey ( 1994 ) stated. there are three cardinal separating characteristics between big and little houses. First. the greater external uncertainness of the environment in which the little house operates and the greater internal consistence of its motives and actions. Second. they have a different function in invention. Small houses are able to bring forth something marginally different. in footings of merchandise or service. which differs from the standardised merchandise or service provided by big houses. A 3rd country of differentiation between little and big houses is the greater likeliness of development and alteration in the smaller house ; little houses that become big undergo a figure of phase alterations.
2. 2. 2 Criticism of the Bolton Committee’s “Statistical” Definition of SMEs ( I ) No individual definition or standard was used for “smallness” . ( figure of employees. turnover. ownership and assets were used alternatively ) ( two ) Three different upper bounds of turnover were specified for the different sectors and two different upper bounds were identified for figure of employees. ( three ) Comparing pecuniary units over clip requires building of index Numberss to take history of monetary value alterations. Furthermore. currency fluctuations make international comparing more hard. ( four ) The definition considered the little house sector to be homogenous ; nevertheless. houses may turn from little to medium and in some instances to big. It was against this background that the European Commission ( EC ) coined the term `Small and Medium Enterprises ( SME ) ’ . The SME sector is made up of three constituents:
( I ) Firms with 0 to 9 employees – micro endeavors
( two ) 10 to 99 employees – little endeavors
( three ) 100 to 499 employees – medium endeavors.
Therefore. the SME sector is comprised of endeavors. which employ less than 500 workers. In consequence. the EC definitions are based entirely on employment instead than a multiplicity of standards. Second. the usage of 100 employees as the little firm’s upper bound is more appropriate given the addition in productiveness over the last two decennaries ( Storey. 1994 ) . Finally. the EC definition did non presume the SME group is homogeneous. that is. the definition makes a differentiation between micro. little. and moderate-sized endeavors. However. the EC definition is excessively all encompassing for a figure of states. Research workers would hold to utilize definitions for little houses that are more appropriate to their peculiar `target’ group ( an operational definition ) . It must be emphasized that debates on definitions turn out to be unfertile unless size is a factor that influences public presentation. For case. the relationship between size and public presentation affairs when measuring the impact of a recognition programme on a targeted group ( besides refer to Storey. 1994 ) .
2. 2. 3 Alternate Definitions of SMEs
World Bank since 1976 – Firms with fixed assets ( excepting land ) less than US $ 250. 000 in value are Small Scale Enterprises. Grindle et Al ( 1988 ) – Small graduated table endeavors are houses with less than or equal to 25 lasting members and with fixed assets ( excludingland ) worth up to US $ 50. 000. USAID in the 1990s – Firms with less than 50 employees and at least half the end product is sold ( besides refer to Mead. 1984 ) . UNIDO’s Definition for Developing States: Large – houses with 100+ workers Medium – houses with 20 – 99 workers Small – houses with 5 – 19 workers Micro – houses with & lt ; 5 workers UNIDO’s Definition for Industrialized Countries: Large – houses with 500+ workers Medium – houses with 100 – 499 workers Small – houses with ?99 workers From the assorted definitions above. it can be said that there is no alone definition for a little and average graduated table endeavor therefore. an operational definition is required.
2. 2. 4 Definitions SMEs in Ghana
Small Scale endeavors have been diversely defined. but the most normally used standard is the figure of employees of the endeavor. In using this definition. confusion frequently arises in regard of the flightiness and cut off points used by the assorted official beginnings. As contained in its Industrial Statistics. The Ghana Statistical Service ( GSS ) considers houses with less than 10 employees as Small Scale Enterprises and their opposite numbers with more than 10 employees as Medium and Large-Sized Enterprises. Ironically. The GSS in its national histories considered companies with up to 9 employees as Small and Medium Enterprises ( Kayanula and Quartey. 2000 ) . An alternate standard used in specifying little and average endeavors is the value of fixed assets in the organisation.
However. the National Board of Small Scale Industries ( NBSSI ) in Ghana applies both the `fixed plus and figure of employees’ standards. It defines a Small Scale Enterprise as one with non more than 9 workers. has works and machinery ( excepting land. edifices and vehicles ) non transcending 10 million Cedis ( US $ 9506. utilizing 1994 exchange rate ) ( Kayanula and Quartey. 2000 ) . The Ghana Enterprise Development Commission ( GEDC ) on the other manus uses a 10 million Cedis upper bound definition for works and machinery.
A point of cautiousness is that the procedure of valuing fixed assets in itself poses a job. Second. the uninterrupted depreciation in the exchange rate frequently makes such definitions out-dated ( Kayanula and Quartey. 2000 ) . Steel and Webster ( 1990 ) . Osei et Al ( 1993 ) in specifying Small Scale Enterprises in Ghana used an employment cut off point of 30 employees to bespeak Small Scale Enterprises. The latter nevertheless dis-aggregated little graduated table endeavors into 3 classs: ( I ) micro -employing less than 6 people ; ( two ) really little. those using 6-9 people ; ( three ) little -between 10 and 29 employees.
2. 3 Why Small and Medium Scale Enterprises?
The pick of little and average graduated table endeavors within the industrial sector for this survey is based on the undermentioned propositions ( Kayanula and Quartey. 2000 ) .
( a ) Large Scale Industry
( I ) Have non been an engine of growing and a good supplier of employment ; ( two ) Already receive tremendous support through general trade. finance. revenue enhancement policy and direct subsidies ;
( B ) Small and Medium Scale Enterprises
( I ) Mobilize financess which otherwise would hold been idle ;
( two ) Have been recognized as a seed-bed for autochthonal entrepreneurship ; ( three ) Are labour intensive. using more labour per unit of capital than big endeavors ;
( four ) Promote autochthonal technological know-how ;
( seven ) Are able to vie ( but behind protective barriers ) ;
( eight ) Use chiefly local resources. therefore have less foreign exchange demands ;
( nine ) Cater for the demands of the hapless and ;
( ten ) Adapt easy to client demands ( flexible specialisation ) . ( Kayanula and Quartey. 2000 ) . 2. 4. 0 The Role and Characteristics of SMEs
2. 4. 1 Role of SMEs in Developing States
Small-scale rural and urban endeavors have been one of the major countries of concern to many policy shapers in an effort to speed up the rate of growing in low income states. These endeavors have been recognized as the engines through which the growing aims of developing states can be achieved. They are possible beginnings of employment and income in many developing states. It is estimated that SMEs employ 22 % of the grownup population in developing states ( Daniels & A ; Ngwira. 1992 ; Daniels & A ; Fisseha. 1993 ; Fisseha. 1992 ; Fisseha & A ; McPherson. 1991 ; Gallagher & A ; Robson. 1995 ) . However. some writers have contended that the occupation making impact of little graduated table endeavors is a statistical defect ; it does non take into history countervailing factors that make the net impact more modest ( Biggs. Grindle & A ; Snodgrass. 1988 ) .
It is argued that increases in employment of Small and Medium Enterprises are non ever associated with additions in productiveness. Nevertheless. the of import function performed by these endeavors can non be overlooked. Small houses have some advantages over their large-scale rivals. They are able to accommodate more easy to market conditions given their loosely skilled engineerings. However. contracting the analysis down to developing states raises the undermentioned mystifier: Make small-scale endeavors have a dynamic economic function? Due to their flexible nature. SMEs are able to defy inauspicious economic conditions. They are more labour intensive than larger houses and hence. hold lower capital costs associated with occupation creative activity ( Anheier & A ; Seibel. 1987 ; Liedholm & A ; Mead. 1987 ; Schmitz. 1995 ) .
Small-scale endeavors ( SSEs ) perform utile functions in guaranting income stableness. growing and employment. Since SMEs are labour intensive. they are more likely to win in smaller urban Centres and rural countries. where they can lend to the more even distribution of economic activity in a part and can assist to decelerate the flow of migration to big metropoliss. Because of their regional scattering and their labour strength. it is argued that small-scale production units can advance a more just distribution of income than big houses. They besides improve the efficiency of domestic markets and do productive usage of scarce resources. therefore. easing long term economic growing.
2. 4. 2 Characteristics of SMEs in Ghana
A distinguishing characteristic of SMEs from larger houses is that the latter have direct entree to international and local capital markets whereas the former are excluded because of the higher intermediation costs of smaller undertakings. In add-on. SMEs face the same fixed cost as Large Scale Enterprises ( LSEs ) in following with ordinances but have limited capacity to market merchandises abroad. SMEs in Ghana can be categorised into urban and rural endeavors. The former can be sub-divided into `organised’ and `unorganised’ endeavors. The organized 1s tend to hold paid employees with a registered office whereas the unorganized class is chiefly made up of craftsmans who work in unfastened infinites. impermanent wooden constructions. or at place and employ small or in some instances no salaried workers.
They rely largely on household members or learners. Rural endeavors are mostly made up of household groups. single craftsmans. adult females engaged in nutrient production of local harvests. The major activities within this sector include: – soap and detergents. cloths. vesture and tailoring. fabric and leather. small town blacksmiths. tin-smithing. ceramics. lumber and excavation. drinks. nutrient processing. bakeshops. wood furniture. electronic assembly. agro processing. chemical based merchandises and mechanics ( Liedholm & A ; Mead. 1987 ; Osei et Al. 1993. World Bank. 1992 ) . It is interesting to observe that small-scale endeavors make better usage of scarce resources than large-scale endeavors.
Research in Ghana and many other states have shown that capital productiveness is frequently higher in SMEs than is the instance with LSEs ( Steel. 1977 ) . The ground for this is non hard to see. SMEs are labour intensive with really little sum of capital invested. Therefore. they tend to witness high capital productiveness. which is an economically sound investing. Therefore. it has been argued that advancing the SME sector in developing states will make more employment chances. lead to a more just distribution of income. and will guarantee increased productiveness with better engineering ( Steel & A ; Webster. 1990 ) .
2. 5 SME Approaches
There are several attacks or theories to entrepreneurship and little and average endeavors. For the intent of this survey. the research squad will brood on three major theories. These include: venture chance. Agency Theory and Theory of Equity Fundss
2. 5. 1 The Venture Opportunity
The venture chance school of idea focal points on the chance facet of venture development. The hunt for thought beginnings. the development of constructs ; and the execution of venture chances are the of import involvement countries for this school. Creativity and market consciousness are viewed as indispensable. Additionally. harmonizing to this school of idea. developing the right thought at the right clip for the right market niche is the key to entrepreneurial success. Major advocates include: N Krueger 1993. Long W. & A ; McMullan 1984. Another development from this school of idea is what is described by McMullan ( 1984 ) as “corridor principle’’ . This rule outlines that. giving anterior attending to new tracts or chances as they arise and implementing the necessary stairss for action are cardinal factors in concern development.
The axiom that “preparation meeting chance. peers “luck” underscores this corridor rule. Advocates of this school of idea believe that proper readying in the interdisciplinary concern sections will heighten the ability to recognize good venture chances. Comparing the survey with the above theory. the inquiry that arises is: What are the factors or chances that have led to the proliferation of little and average graduated table endeavors in Medina Township? Is it due to a peculiar market niche. creativeness or market awareness? If so. so what socio-economic impact do they hold on the people of Medina Township?
2. 5. 2 Agency Theory
Agency theory trades with the people who own a concern endeavor and all others who have involvements in it. for illustration directors. Bankss. creditors. household members. and employees. The bureau theory postulates that the twenty-four hours to twenty-four hours running of a concern endeavor is carried out by directors as agents who have been engaged by the proprietors of the concern as principals who are besides known as stockholders. The theory is on the impression of the rule of ‘two-sided transactions’ which holds that any fiscal minutess involves two parties. both moving in their ain best involvements. but with different outlooks. Major advocates of this theory include: Eisenhardt 1989. Emery et al. 1991 and JH Davis – 1997. These Advocates of bureau theory assume that agents will ever hold a personal involvement which conflicts the involvement of the principal. This is normally referred to as the Agency job.
2. 5. 3 Theory of Equity Fundss
Equity is besides known as owners’ equity. capital. or net worth. Costand et Al ( 1990 ) suggests that ‘larger houses will utilize greater degrees of debt funding than little houses. This implies that larger houses will trust comparatively less on equity funding than do smaller firms’ . Harmonizing to the picking order model. the little endeavors have two jobs when it comes to equity support [ McMahon et Al. ( 1993. pp153 ) ] : 1 ) Small endeavors normally do non hold the option of publishing extra equity to the populace.
2 ) Owner-managers are strongly antipathetic to any dilution of their ownership involvement and control. This manner they are unlike the directors of big concerns who normally have merely a limited grade of control and limited. if any. ownership involvement. and are hence prepared to acknowledge a broader scope of support options. Modern fiscal direction is non the ultimate reply to every caprice and impulse. However. it could be argued that there is some nutrient for idea for SMEs refering every construct. For illustration Access to Capital is truly eye-opener for SMEs in Ghana to carve their manner into prolonging their growing.
2. 6 Policies for Promoting SMEs in Ghana
Small-scale endeavor publicity in Ghana was non impressive in the sixtiess. Dr. Nkrumah ( President of the First Republic ) in his modernisation attempts emphasized province engagement but did non promote the domestic autochthonal sector. The local entrepreneurship was seen as a possible political menace. To decline the state of affairs. the impairment in the Balance of Payments in the 1980s and the overestimate of the exchange rate led to cut down capacity use in the import dependent large-scale sector. Rising rising prices and falling existent rewards besides forced many formal sector employees into secondary self-employment in an effort to gain a nice income. As the economic system declined. large-scale fabrication employment stagnated ( Kayanula and Quartey. 2000 ) .
Harmonizing to Steel and Webster ( 1991 ) . little graduated table and self-employment grew by 2. 9 % per annum ( 10 times as many occupations as big scale employment ) but their activities accounted for merely a 3rd of the value added. It was in the visible radiation of the above that the authorities of Ghana started advancing small-scale endeavors. They were viewed as the mechanism through which a passage from state-led economic system to a private oriented developmental scheme could be achieved. Thus the SME sector’s function was re-defined to include the undermentioned ( Kayanula and Quartey. 2000 ) : ( I ) Helping the province in cut downing its engagement in direct production ( two ) Absorbing labor from the province sector. given the comparatively labour intensive nature of little graduated table endeavors. and ; ( three ) Developing autochthonal entrepreneurial and managerial accomplishments needed for sustained industrialisation.
2. 6. 1 Government and Institutional Support to SMEs
To enable the sector perform its function efficaciously. the undermentioned proficient. institutional and fiscal supports were put in topographic point by authorities.
( I ) Government
Government. in an effort to beef up the response of the private sector to economic reforms undertook a figure of steps in 1992. Prominent among them is the puting up of the Private Sector Advisory Group and the abolishment of the Manufacturing Industries Act. 1971 ( Act 356 ) that repealed a figure of monetary value control Torahs. and The Investment Code of 1985 ( PNDC Law 116 ) . which seeks to advance joint ventures between foreign and local investors. In add-on to the above. a Legislative Instrument on Immigrant Quota. which grants automatic immigrant quota for investors. has been enacted. Besides. certain Technology Transfer Regulations have been introduced. Government besides provided equipment leasing. an alternate and flexible beginning of long term funding of works and equipment for endeavors that can non afford their ain. A Common Credit Guarantee Scheme was besides set up for enterprisers who have inadequate or no collateral and has limited entree to bank recognition.
To complement these attempts. a Rural Finance Undertaking aimed at supplying long-run recognition to small-scale husbandmans and craftsmans was set up. In 1997. authorities proposed the constitution of an Export Development and Investment Fund ( EDIF ) . operational under the Exim Guarantee Company Scheme of the Bank of Ghana. This was in assistance of industrial and export services within the first one-fourth of 1998. To further better the industrial sector. harmonizing to the 1998 Budget Statement. specific attending was to be given to the undermentioned industries for support in accessing the EDIF for rehabilitation and retooling: Textiles/Garments ; Wood and Wood Processing ; Food and Food Processing and Packaging. It was besides highlighted that authorities would back up industries with export potency to get the better of any supply-based trouble by accessing EDIF and apologize the duty government in a command to better their export fight.
In add-on. a particular monitoring mechanism has been developed at the Ministry of Trade and Industries. In a command to better trade and investing. peculiarly in the industrial sector. trade and investing facilitating steps were put in topographic point. Visas for all classs of investors and tourers were issued on reaching at the ports of entry while the Customss Excise and Preventive Service at the ports were made proactive. runing 7-days a hebdomad. The authorities continued back uping programmes aimed at accomplishments developing. enrollment and arrangement of occupation searchers. preparation and re-training of redeployees. This resulted in a 5 % rise in registration in the assorted developing institutes such as The National Vocational and Training Institute ( NVTI ) . Opportunity Industrialization Centres ( OIC ) . etc. As at the terminal of 1997. 65. 830 out of 72. 000 redeployees who were re-trained under maestro craftsmen have been provided with tools and have become freelance.
( two ) Institutions
The thought of SME publicity has been in being since 1970 though really small was done at the clip. Cardinal establishments were set up to help SMEs and outstanding among them was The Office of Business Promotion. now the present Ghana Enterprise Development Commission ( GEDC ) . It aims at helping Ghanese business communities to come in into Fieldss where aliens chiefly operated but which became available to Ghanaians after the ‘Alliance Compliance Order’ in 1970. GEDC besides had bundles for beef uping small-scale industry in general. both technically and financially. The Economic Recovery Programme instituted in 1983 has broadened the institutional support for SMEs. The National Board for Small Scale Industries ( NBSSI ) has been established within the so Ministry of Industry. Science and Technology now ( Ministry of Science and Technology ) to turn to the demands of little concerns.
The NBSSI established an Entrepreneurial Development Programme. intended to develop and help individuals with entrepreneurial abilities into self-employment. In 1987. the industrial sector besides witnessed the coming into operation of the Ghana Appropriate Technology Industrial Service ( GRATIS ) . It was to oversee the operations of Intermediate Technology Transfer Units ( ITTUs ) in the state. GRATIS aims at upgrading little scale industrial concerns by reassigning appropriate engineering to little graduated table and informal industries at the grass root degree. ITTUs in the parts are intended to develop the technology abilities of little graduated table fabrication and service industries engaged in vehicle fixs and other related trades. They are besides to turn to the demands of non-engineering industries. So far. 6 ITTUs have been set up in Cape Coast. Ho. Kumasi. Sunyani. Tamale and Tema.
( three ) Financial Assistance
Access to recognition has been one of the chief constrictions to SME development. Most SMEs lack the necessary collateral to obtain bank loans. To turn to this issue. the Central Bank of Ghana has established a recognition warrant strategy to subvention loans made by Commercial Banks to small-scale endeavors. Unfortunately. the strategy did non work out as expected. It was against this background that the Bank of Ghana obtained a US $ 28 million recognition from the International Development Association ( IDA ) of the World Bank for the constitution of a Fund for Small and Medium Enterprises Development ( FUSMED ) . Under the Programme of Action to Extenuate the Social Cost of Adjustment ( PAMSCAD ) . a revolving fund of US $ 2 million was set aside to help SMEs. This facet is excessively bare in the thick of the abundant information. particularly with mention to Ghana.
2. 7 Gender and Small Business Performance
Until more late gender differences in little concern public presentation remained mostly unaddressed by societal scientists ( Greene. Hart. Gatewood. Brush. & A ; Carter. 2003 ) . The bulk of surveies either forgotten gender as a variable of involvement or excluded female topics from their design ( Du Rietz & A ; Henrekson. 2000 ) . However. it is by and large accepted that male and female owner-managers behave otherwise and that these behavioural differences influence their public presentation ( Brush. 1992 ) . but these differences have been recognized but non to the full explained ( Brush & A ; Hisrich 2000 ) . A comparing of public presentation of male and female owner-managers in Java. Indonesia showed that female-owned concerns tend to be less orientated towards growing compared to male-owned concerns ( Singh. Reynolds. & A ; Muhammad. 2001 ) .
Boden & A ; Nucci ( 2000 ) investigated start-ups in the retail and service industries and found that the average endurance rate for male owned concerns was four to six per centum higher than for female owned concerns. Loscocco. Robinson. Hall & A ; Allen ( 1991 ) in their survey of little concerns in the New England part of the USA found that both gross revenues volume and income degrees were lower for female- than for male-owned concerns. In a longitudinal survey of 298 little houses in the United Kingdom ( UK ) . of which 67 were female owned. Johnson & A ; Storey ( 1994 ) observed that whilst female owner-managers had more stable endeavors than their male opposite numbers. on mean the gross revenues turnover for female proprietors were lower than for male proprietors.
Brush ( 1992 ) suggests that adult females perform less on quantitative fiscal steps such as occupations created. gross revenues turnover and profitableness because they pursue intrinsic ends such as independency. and the flexibleness to unite household and work committednesss instead than fiscal addition. In contrast to the above findings. Du Rietz and Henrekson ( 2000 ) reported that female-owned concerns were merely every bit successful as their male opposite numbers when size and sector are controlled. In his survey of little and average houses in Australia. Watson ( 2002 ) . after commanding for the consequence of industry sector. age of the concern. and the figure of yearss of operation. besides reported no important differences in public presentation between the male- controlled and female-controlled houses.
