In Ghana, small and micro enterprise owners (SMEOs) face a lot of business management challenges and it is alleged that they suffer, mostly, in terms of their financial management practices. Using a purposive sampling technique in a self-administered data collection, this study attempts to highlight the specific financial management practices by the selected business owners. In all, 372 SMEOs responded and this was made up of the small enterprise segment (118) and the micro enterprises (254), selected from the twenty administrative district capitals in the Central Region of Ghana. The findings show how haphazard, perhaps carelessly, the business owners have financially managed their respective enterprises. Indeed, only 13% of the respondents actually understand the meaning of financial management, and regardless of the business segment differences, majority (36%) of the respondents had misconceived that maintaining proper financial records was all that financial management meant. Further worrying, is the fact that only 13% of overall respondents were specific that they did not understand the meaning of financial management, in addition to several intriguing revelations. The study recommends stakeholder collaborative efforts involving business schools in both polytechnics and universities with relevant agencies and NGOs in building the financial management skills and capacities of the business owners. On their own, the enterprise owners have been advised to urgently take steps to acquire these relevant skills since they need and benefit most. Future research recommendations include a study on the impact of financial management on these businesses.
Abstract:Commercial banks play a crucial role in credit financing of individuals, institutions and generally, their clients.They use a system of credit management to govern their operations in this regard. Specifically, they do this through established credit policies or systems and to an extent, the relevant policy determines a given quantum of credit finance on case-by-case basis but most importantly, whether or not to grant the credit finance request upon assessment. Conveniently sampling the perspectives of both credit officers (15) and customers (67) of the Prudential Bank Limited, primary and secondary data sources were used, with the primary data obtained through unstructured interviews and two sets of self-administered questionnaire for the respective respondent-categories. The findings reveal that both categories of respondents recommend the need for the bank to decentralise its credit finance application processing and approval system. Due to the bank's existing credit policy, customers had to wait, on average, one month for the approval or otherwise of their requests, with the salariedworker customer-group granted more credit finance than the others. Also, the bank had granted more credit in the form of loans. Sadly, business persons and other categories of customers were waiting three months for response to their credit finance requests. The customers and their bankers disagreed in their respective perspectives regarding the main reason(s) for granting or declining credit finance requests as well as on matters of collateral security. Among others, the study recommends the shortening of credit facility processing time to enhance the bank's competitive drive in the banking industry and also to make these facilities more responsive to the needs of the customers. Future research is expected to conclude on the extent of impact that banks' credit policies have on their credit finance creation.
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