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| Assessing the Correlation between Financial Records of SMEs and Access to Credit in Ghana |
Appiah Kusi, Suleman Yussif, and Alhassan Ismail
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Abstract:
The purpose of this study was to find out the correlation between financial records of small scale enterprises and access to credit. The study showed that less a number of Small Scale enterprises (SSEs) keep petty cash voucher, payment voucher, credit not, debit note, and tally or bin card as source documents. This however does not translate into complete set of books and for that matter only a majority keep sales day book and a less number keep purchase day book, return inwards, general journal and cash book. Study showed that Small Scale Enterprises (SSEs) are asked to provide financial records and collateral security as a requirement in accessing credit. The study showed us that Small Scale Enterprises (SSEs) faces challenges such as no security to pledge and default on previous loan in accessing credit. The study also revealed that Small Scale Enterprises (SSEs) faces challenges in loan repayments such as short durations, high interest rate, high monthly repayments, and low turnover. The study realized that small scale enterprises should be given training on basic book principles and they should be taught some source documents and their usefulness and above all the importance of financial record keeping and its enhancement in accessing credit. The study also realized that some small scale enterprises are not registered and moreover they do not have tax identification number and the researchers recommended that government and other stakeholders should educate small scale enterprises on the need to register and have tax identification number.
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