Determinants of Loan Repayment Performance of Small and Medium Enterprises (SMEs) in Ghana: The Case of Asante Akyem Rural Bank |
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Authors: | Ahmed Tijani Salifu Zakiya Tofik-Abu M. Arifur Rahman |
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Affiliation: | 1. Department of Accounting, Islamic University College-Ghana, Accra, Ghana;2. Alijos Consultancy Services, Konongo, Ghana;3. School of Business and Economics, North South University, Dhaka, Bangladesh |
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Abstract: | We examine the role of a typical set of determinants of loan repayment performance of SMEs in the context of a rural bank’s setting in Ghana. Our analysis using survey data suggests that, while higher application cost, loan size and interest rate exert significantly negative influence on loan repayment, higher educational background of the SME operators is associated with significantly better repayment performance. Interestingly, in comparison with those with only primary-level education, SME operators with tertiary education register the best repayment performance followed by those with secondary education. We provide detailed discussion and managerial implications of these findings. |
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Keywords: | Loan repayment performance small and medium-sized enterprises Rural Bank Ghana |
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