Assessing the Factors Influencing the Performance of Small and Medium Scale Enterprises in Tamale Metropolis, Ghana

Abstract

The study was aimed at assessing the factors influencing the performance of Small and Medium Scale Enterprises in the Tamale Metropolis.  In order for SMEs to achieve their desired objectives, there is the need for a thorough investigation to unearth those factors that affect their performance. Therefore, this study sought to examine the nature of funding for the SMEs as well as the challenges facing these SMEs in the Tamale Metropolis. The study adopted a descriptive research design to assess the factors influencing the performance of SMEs in the Tamale metropolis. The study relied on systematic and purposive sampling techniques in selecting a total of 235 respondents for the study. It was revealed from the study that most of the SMEs in the Tamale metropolis were funded basically from personal savings of the owners. It was also revealed that SMEs did not get the needed support or incentives from Government and other relevant stakeholders in the Metropolis. The study further revealed that SME operators had difficulty in accessing credit from the mainstream commercial banks and other credit lending institutions as a result of collateral requirements and other bureaucratic procedures involved.  The study concluded that lack of access to credit from the mainstream commercial banks and other credit lending institutions, coupled with high interest rates and taxes on goods and services adversely affected the performance of SMEs in the Tamale metropolis. The study also concluded that lack of Government support for SME operators in the metropolis was also responsible for their abysmal performance. The study recommended capacity building for SME operators to enhance their business management and entrepreneurial skills to enable them identify and exploit business opportunities locally and internationally.