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.
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.
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The major activities within this sector include:- soap and detergents, fabrics, clothing and tailoring, textile and leather, village blacksmiths, tin-smithing, ceramics, timber and mining, bricks and cement, beverages, food processing, bakeries, wood furniture, electronic assembly, agro processing, chemical based products and mechanics (UNECA 2010, Kayanula and Quartey 2000).
Among their many roles, SMEs in Ghana have been crucial in mobilising funds which otherwise would have been idle (Kayanula and Quartey 2000).This is not an example of the work produced by our Essay Writing Service.You can view samples of our professional work here.Hence, definitions which employ measures of size (number of employees, turnover, profitability, net worth, etc.) when applied to one sector could lead to all firms being classified as small, while the same size definition when applied to a different sector could lead to a different result.Kayanula and Quartey in their research however identified a number of common definitions used when referring to SMEs in Ghana that could be used for purposes of this essay.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.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.The former can be sub-divided into `organised’ and `unorganised’ enterprises.The organised ones tend to have paid employees with a registered office whereas the unorganised category is mainly made up of artisans who work in open spaces, temporary wooden structures, or at home and employ little or in some cases no salaried workers. Rural enterprises are largely made up of family groups, individual artisans, women engaged in food production from local crops.