Title: Financing SMEs in Ghana: evidence of the optimal credit guarantee ratio

Authors: Sun Wubin; Jafaro Arthur; Emmanuel Kwesi Agyapong

Addresses: School of Humanities, Law and Economics, Northwestern Polytechnical University, Xi'an, 710000, China ' School of Humanities, Law and Economics, Northwestern Polytechnical University, Xi'an, 710000, China ' School of Humanities, Law and Economics, Northwestern Polytechnical University, Xi'an, 710000, China

Abstract: Inadequate access to finance by small and medium scale enterprises (SMEs) in Ghana prevents SMEs from thriving and making impact in the global market. Therefore, it is essential to adopt a financial strategy to provide SMEs with adequate and stable finance. This research adopted a theoretical model and an empirical analysis to calculate for the optimal credit guarantee ratio that government should provide to support SMEs in Ghana. The results show that optimal credit guarantee ratios vary from each bank or group of banks based on their healthiness which ensures efficiency and stability of lending to SMEs.

Keywords: inadequate access to finance; SMEs; small and medium scale enterprises; optimal credit guarantee ratio; global market; lending to SMEs; healthiness of banks.

DOI: 10.1504/IJTGM.2022.120886

International Journal of Trade and Global Markets, 2022 Vol.15 No.1, pp.88 - 95

Received: 12 Feb 2020
Accepted: 01 Jul 2020
Published online: 16 Feb 2022 *

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