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Credit Alone Is Not enough for Small Business Loans – Dr. Mrs. Joyce Ama Quartey Reveals

A recent study by Dr Mrs Joyce Quartey has revealed that most microfinance institutions (MFIs) provide only financial
services to their clients. Meanwhile, most of the clients do not keep proper accounts of their businesses. The need for
providing other services such as training in book-keeping and business development by MFIs cannot be overemphasized.
This was established in a study she conducted under the title,
‘Microfinance as a Tool for Small Business Growth in Urban Ghana’.

Dr. Mrs. Joyce Ama Quartey is currently the Dean of Business School, a Senior Lecturer and the immediate past
Head of Accounting and Finance Department of the Christian Service University College, Kumasi. She had her PhD
in Finance at the University of New England, Armidale, Australia in 2015 and comes with rich teaching experience
and research background with 17 years working experience at CSUC.

In this study conducted with a former colleague Mrs Abigail Asamoah, she made known that while a number of studies
have shown evidence of positive impact of microfinance on the growth of small businesses, others have shown evidence
of microfinance worsening the plight of similar businesses by exacerbating their indebtedness. It is in the light of these
conflicting views that this study sought to investigate the role of microfinance in promoting the growth of small business
in Ghana. Microfinance in Ghana provides a great potential to support economic activities of small businesses.

The study examined the impact of microfinance on the growth of small businesses in urban Ghana. It used responses to
structured and unstructured questionnaire elicited from a cluster sampling of 213 clients from 58 microfinance institutions
(MFIs) in the Ashanti and Greater Accra regions, which constitute the two most urbanized regions of Ghana. Multiple and
logistic regression analyses showed that the increase in business profits, stock and business assets after the acquisition
of microfinance loans were statistically significant, indicating that the loan amount had significant impact on profit levels,
stock adjustments, and acquisition of business assets. However, the change in employment was statistically insignificant.

The study finally recommends the development of appropriate loan products and services that meet the needs of small
business operators to sustain and enhance the growth of their businesses.


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