International Journal of Entrepreneurship and Small Business
The role played by small and medium scale enterprises (SMEs) in employment creation, economic gro... more The role played by small and medium scale enterprises (SMEs) in employment creation, economic growth and poverty reduction of the developing world cannot be overemphasised. However, the ability of these enterprises to access credit in order to expand their businesses has for years remain a key challenge. Past studies on credit denial among SMEs have emphasised firms' characteristics with little emphasis on firm owners' characteristics such as gender. The present study revisits previous studies and provides evidence supporting our hypothesis that gender matters in credit denial among SMEs. The study relies mainly on primary data and applies the binary probit estimation technique to the dataset. The study reveals among others that owners of small and medium scale enterprises who are females are less likely to be denied credit. Given the findings, recommendations and relevant policy implications are provided.
The introduction of capital market in Ghana with the establishment of the Ghana Stock Exchange (G... more The introduction of capital market in Ghana with the establishment of the Ghana Stock Exchange (GSE) in 1989 was received as an initiative that provides an alternative avenue for businesses to raise long term capital to finance their operations and list on the exchange. The Government was also expected to divest its interest in the over 300 state-owned enterprises (SOEs) at the time through the GSE to boost activity on the stock market. After 25 years of capital market operation, a large number of medium and large scale companies still operate outside the formal capital market and mostly depend on bank finance in spite of limited access to credit which has been identified as critical factor constraining business growth in Ghana. The low utilization of capital market finance has implication for the number of companies listed on the GSE. With 11 companies listed in 1990, the number increased to 37 in 2016, giving an average of one listed company per year. To this end, the main purpose...
Financial institutions approve and disburse loans to individuals and firms to generate profit for... more Financial institutions approve and disburse loans to individuals and firms to generate profit for their sustainability. However, one major challenge financial institutions face is loan default. Multiple borrowing is widely acknowledged as a major factor that contributes to loan default; but there is virtually no empirical evidence in support of this claim especially in the case of sub-Saharan African countries. This study therefore examines the impact of multiple borrowing on loan default with evidence from small and medium enterprises (SMEs). We rely on primary data and employ the binary probit regression for our analysis. The results show that SMEs that have multiple borrowing are more likely to default. The study therefore recommends loan and credit officers of financial institutions to be more diligent and circumspect in their quality control checks and credit appraisal of prospective borrowers. Again, the study suggests establishment of more Credit Reference Bureaus under the Credit Reporting Act, 2007 (Act 726) which facilitate information sharing among financial institutions about credit activities of borrowers. These are likely to reduce incidence of loan default because potential defaulters will be exposed and subsequently their loan applications declined.
International journal of entrepreneurship and small business
The role played by small and medium scale enterprises (SMEs) in employment creation, economic gro... more The role played by small and medium scale enterprises (SMEs) in employment creation, economic growth and poverty reduction of the developing world cannot be overemphasised. However, the ability of these enterprises to access credit in order to expand their businesses has for years remain a key challenge. Past studies on credit denial among SMEs have emphasised firms' characteristics with little emphasis on firm owners' characteristics such as gender. The present study revisits previous studies and provides evidence supporting our hypothesis that gender matters in credit denial among SMEs. The study relies mainly on primary data and applies the binary probit estimation technique to the dataset. The study reveals among others that owners of small and medium scale enterprises who are females are less likely to be denied credit. Given the findings, recommendations and relevant policy implications are provided.
International Journal of Entrepreneurship and Small Business
The role played by small and medium scale enterprises (SMEs) in employment creation, economic gro... more The role played by small and medium scale enterprises (SMEs) in employment creation, economic growth and poverty reduction of the developing world cannot be overemphasised. However, the ability of these enterprises to access credit in order to expand their businesses has for years remain a key challenge. Past studies on credit denial among SMEs have emphasised firms' characteristics with little emphasis on firm owners' characteristics such as gender. The present study revisits previous studies and provides evidence supporting our hypothesis that gender matters in credit denial among SMEs. The study relies mainly on primary data and applies the binary probit estimation technique to the dataset. The study reveals among others that owners of small and medium scale enterprises who are females are less likely to be denied credit. Given the findings, recommendations and relevant policy implications are provided.
The introduction of capital market in Ghana with the establishment of the Ghana Stock Exchange (G... more The introduction of capital market in Ghana with the establishment of the Ghana Stock Exchange (GSE) in 1989 was received as an initiative that provides an alternative avenue for businesses to raise long term capital to finance their operations and list on the exchange. The Government was also expected to divest its interest in the over 300 state-owned enterprises (SOEs) at the time through the GSE to boost activity on the stock market. After 25 years of capital market operation, a large number of medium and large scale companies still operate outside the formal capital market and mostly depend on bank finance in spite of limited access to credit which has been identified as critical factor constraining business growth in Ghana. The low utilization of capital market finance has implication for the number of companies listed on the GSE. With 11 companies listed in 1990, the number increased to 37 in 2016, giving an average of one listed company per year. To this end, the main purpose...
Financial institutions approve and disburse loans to individuals and firms to generate profit for... more Financial institutions approve and disburse loans to individuals and firms to generate profit for their sustainability. However, one major challenge financial institutions face is loan default. Multiple borrowing is widely acknowledged as a major factor that contributes to loan default; but there is virtually no empirical evidence in support of this claim especially in the case of sub-Saharan African countries. This study therefore examines the impact of multiple borrowing on loan default with evidence from small and medium enterprises (SMEs). We rely on primary data and employ the binary probit regression for our analysis. The results show that SMEs that have multiple borrowing are more likely to default. The study therefore recommends loan and credit officers of financial institutions to be more diligent and circumspect in their quality control checks and credit appraisal of prospective borrowers. Again, the study suggests establishment of more Credit Reference Bureaus under the Credit Reporting Act, 2007 (Act 726) which facilitate information sharing among financial institutions about credit activities of borrowers. These are likely to reduce incidence of loan default because potential defaulters will be exposed and subsequently their loan applications declined.
International journal of entrepreneurship and small business
The role played by small and medium scale enterprises (SMEs) in employment creation, economic gro... more The role played by small and medium scale enterprises (SMEs) in employment creation, economic growth and poverty reduction of the developing world cannot be overemphasised. However, the ability of these enterprises to access credit in order to expand their businesses has for years remain a key challenge. Past studies on credit denial among SMEs have emphasised firms' characteristics with little emphasis on firm owners' characteristics such as gender. The present study revisits previous studies and provides evidence supporting our hypothesis that gender matters in credit denial among SMEs. The study relies mainly on primary data and applies the binary probit estimation technique to the dataset. The study reveals among others that owners of small and medium scale enterprises who are females are less likely to be denied credit. Given the findings, recommendations and relevant policy implications are provided.
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Papers by Jacob Aidoo