AN INVESTIGATION INTO THE CONTRIBUTION OF SMALL SCALE AND MEDIUM ENTERPRISES (SMEs) TO THE GROWTH OF DEVELOPING ECONOMIES: A CASE STUDY OF THE SUNYANI MUNICIPALITY

ABSTRACT
Micro, Small and Medium Scale Enterprises contributes a colossal percentage to Gross Domestic Product (GDP) in ensuring economic growth, employment, income stability and poverty reduction in most developing countries like Ghana. It is in line with this that this study identifies the contributions of these industries and come out with ways and means, which will sustain the vibrancy for SMEs so that they play the expected vital roles as the engine of growth in our economic development.
In order to investigate the contributions, a conceptual and theoretical framework of the study was designed. These guided the design of data collection instrument to suit the research. The study combined survey and case study methods of data collection and analysis. The study revealed among other things that: high female and youth domination, low level of education among entrepreneurs and lack of qualified personnel. The study also brought to light some major contributions of the sector which includes employment creation, revenue generation, poverty reduction and sustainable economic development systems among others.
In view of these massive contributions, major recommendations proposed include the need for; setting up a common board to regulate the activities of the SMEs support institution, Metropolitan and Municipal level to support SMEs activities, establishment of SMEs Bank in Ghana, literacy training for entrepreneurs and formation of SMEs policies to control them.

Finally, effective implementation of the recommendation could lead to a further improvement of the SMEs sector in the Sunyani Municipality and eventually result in creation of more employment as well as poverty reduction in Ghana.

TABLE OF CONTENTS
CHAPTER ONE:
INTRODUCTION
1.0 Background of the Study
1.1 Problem Statement
1.2 Research Questions
1.3 Research Objective
1.4 Significance of the Study
1.5 Limitations
1.6 Organisation of the Study
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction
2.1 Definitions and Classification of SMEs In Global Context
2.2 Definition of SMEs in Ghanaian Context
2.3 Operational Definition of SMEs
2.4 SMEs Development in Ghana
2.5 Challenges of SMEs
2.6 Role of SMEs to Economic Development
2.6.1 Employment
2.6.2 Revenue
2.6.3 Productive Use of Scarce Resources
2.6.4 Poverty Reduction and Sustainable Economic Development Systems
CHAPTER THREE: METHODOLOGY
3.0 Introduction
3.1 Scope
3.2 Research Design
3.3 Sample Population
3.4 Sampling & Sampling Techniques
3.5 Data Collection
3.6 Instrumentation
3.7 Data Analysis
3.8 Timetable or Timescale
3.9 Limitations
3.10 Delimitations

References 

CHAPTER ONE
INTRODUCTION
1.0 Background of the Study
There is growing recognition of the important role Small Scale and Medium Scale Enterprises (SMEs) play in economic development. They are often described as efficient and prolific job creators, the seeds of big businesses and the fuel of national economic engines. Even in the developed industrial economies, SMEssector is the largest employer of workers. Interest in the role of SMEs in the development process continues to be in the forefront of policy debates in most countries. Governments at all levels have undertaken initiatives to promote the growth of SMEs (Feeney and Riding, 1997: Carsamer, 2009).
Micro, Small and Medium Enterprises (SMEs) in Ghana are said to be a characteristic feature of the production landscape and have been noted to provide about 85% of manufacturing employment of Ghana (Aryeetey, 2001). SMEs are also believed to contribute about 70% to Ghana’s Gross Domestic Product (GDP) and account for about 92% of businesses in Ghana(Cook and Nixson, 2000).SMEs therefore having a crucial role to play in stimulating growth, generating employment and contributing to poverty alleviation, given their economic weight in African countries. SMEs development can encourage the process of both inter and intra-regional decentralization; and, reckon force in catching up with economic superpowers of larger economies in the developed world.
More generally, the development of SMEs is seen as accelerating the achievement of wider socioeconomic objectives, including poverty alleviation (Cook and Nixson, 2000). A lot has been said and written about SMEsthe world over. It has also formed the subject of discussions in so many seminars and workshops both locally and internationally. In the same token, governments at various levels (local, state and regional levels) have in one way or the other focused on the Micro and Small Enterprises (SMEs). Governments almost all over the world are formulating policies which are aiming at facilitating and empowering the growth, development and performance of the SMEs. Some of the government’s efforts relate to focus on assisting the SMEs to grow through soft loans, managerial training and other fiscal incentives through support from international agencies and organizations like World Bank and United Nations Industrial Development Organisation (UNIDO).
Perhaps, no other development strategy has enjoyed as much prominence in Ghana’s development plans as the Small Scale and Medium Enterprises (SMEs) in recent years, particularly since the adoption of the economic reform programme in Ghana from year 2000, there has been a decisive switch of emphasis from the grandiose, capital intensive, large scale industrial project based on the philosophy of import substitution to micro and small scale enterprises with immense potentials for developing domestic linkages for rapid, sustainable industrial development.  There exist lots of business organization that are been engaged by individuals, group of people or association; industries and Government with the aim of maximizing profit. These business enterprises range from Small to Medium and from Medium to Large scale.
It has however been worrisome that despite the incentives, policies, programmes and support aimed at revamping the SMEs, they have performed rather below expectation in Ghana. Different people, organisations, and operators have advanced various reasons as to why SMEs have not been able to live up to their expectations. While an average operator will always hinge his failure on lack of access to finance, some others think otherwise arguing that inappropriate management skills, huge some of foreign substitute goods, lack of entrepreneurial skills and know how, poor infrastructure etc. are largely responsible.
Some others have argued that the bane of SMEs in Ghana is the lack of long-term loans since most loans in the Ghana market are short-term while what SMEs require to grow and become really successful is long-term patient capital. The key ones include inadequate infrastructural facilities (road water electricity etc.), insecurity of lives and property, inconsistent monetary, fiscal and industrial policies, limited access to markets, multiple taxation and levies, lack of modern technology for processing and preserving products, policy reversals, capacity limitations, data inadequacies, harsh operating environment, fragile ownership base, fragile capital base.
While some of the challenges that SMEs face are induced by the operating environment (government policies, globalization effects, financial institutions, local government policies, attitude to work etc.), other challenges are driven by the inherent characteristics of the SMEs themselves but in the mist of all this challenges there has been enormous development or contributions due to (SMEs) it is with this issue that the researcher wish to look at the contributions of SMEs in Ghana.

1.1 Problem Statement
Micro, Small and Medium Scale Enterprises (SMEs) has over the years suffered to an extent leading to their collapse since they have not performed creditably well and hence have not played the expected vital role in the economic growth and development of Ghana. This situation has been of great concern to the government, citizenry, operators, practitioners and the organised private sector groups. Year in year out, government’s, non-governmental organizations and other donor countries have made budgetary allocations, policies and pronouncements with the aim of promoting the growth of SMEs due to the crucial role of the SMEs sub-sector of the economy.
There have also been fiscal incentives, grants, bilateral and multilateral agencies support, aids as well as specialized institutions all geared towards making the SMEs sub-sector vibrant. Just as it has been a great concern to all and sundry to promote the welfare of SMEs, it has also been a great cause of concern to all about the fact that this vital sub-sector has fallen short of expectation. The situation is more disturbing and worrying when compared with what other developing and developed countries have been able to achieve with their SMEs.
The poor performance of SMEs in the face of numerous policies by different groups like government, Non-governmental organizations and other donor countries means that if Ghana wants to achieve an appreciable success towards attaining the Vision 2015 goals, then one way will be to vigorously pursue the development of its SMEs properly. The underperformance SMEs may indeed make Ghana’s vision be a mirage unless there is a turnaround of our SMEs fortunes sooner than later. The time is now to do something surgical operation to the situation of our SMEs given the aggravating level of poverty in Ghana and the need to meet up with the Vision 2015 Goals.
In spite of all this challenges that SMEs face there has been an immense contribution in the percentage to Gross Domestic Product (GDP) in ensuring growth, employment and income stability of a country. In view of the fact that SMEs are labour demanding, they are more likely to succeed in smaller urban centers and rural areas, where they can contribute to a more even distribution of economic activity in a country and can help to slow the flow of migration to large cities. SMEs also improved the efficiency of domestic markets and make productive use of scarce resources, thus facilitating long-term economic growth. SMEs also seem to have advantages over their large-scale competitors in that they are able to adapt more easily to market conditions, given their broadly skilled technologies. They are able to withstand adverse economic conditions because of their flexible nature. The sector has the potential to contribute towards reducing poverty among both rural and urban cities in most developing countries like Ghana and others in the sub-Sahara Africa.

            In the face of these numerous challenges, little is known about the actual and main contribution of SMEs to the development in Ghana. There must be some survival strategies, which are not known to many SMEs promoters. This research is also intended to explore and unravel some of the key business survival strategies which are of vital role to SMEs growth and development. Theunraveling of key business survival strategies of SMEs will enable reduction to the barest minimum, unemployment and the poverty situation in the country because of the immense contribution of the sub-sector to their economic growth and development. This means that a lot more needs to be done including a paradigm shift in the focus and administration or implementation of the policies and programmes to the more vibrant ways of developing SMEs in Ghana. It is in line with the foregoing that the study therefore looks at the contributions of SMEs in Ghana.

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Item Type: Ghanaian Project Material  |  Attribute: 36 pages  |  Chapters: 1-3
Format: MS Word  |  Price: GH110 ($20)  |  Delivery: Within 30Mins.
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