Access to credit remains the single biggest challenge facing small and medium-sized enterprises (SMEs) in Ghana, despite several government and banking sector interventions aimed at supporting the private sector.
Dr. Andy Ayiku, Senior Lecturer at the University of Professional Studies, Accra (UPSA) and an SME Industry Coach, says the problem is no longer just about the availability of loans but the conditions attached to them and the ability of small businesses to qualify.
“Most SMEs are not saying banks are not lending at all. What they are saying is that the requirements make it almost impossible for them to access credit when they need it,” he said in an interview.
SMEs account for a significant share of employment in Ghana and play a key role in trade, services, manufacturing and agribusiness.
However, many operators say limited access to affordable financing continues to slow expansion, restrict job creation and weaken productivity.
Dr. Ayiku explained that high interest rates, strict collateral requirements and weak financial records remain the three biggest barriers to SME financing.
According to him, even when interest rates begin to decline, many small businesses still struggle because they lack the formal documentation required by banks.
“Many SMEs operate informally or semi-formally. When they approach banks, they are asked to present audited accounts, business plans and collateral, which most of them do not have,” he said.
Some commercial banks also argue that lending to SMEs carries higher risk, especially in an environment where businesses face unstable power supply, currency fluctuations and rising operating costs.
As a result, banks often prefer lending to larger companies or investing in government securities, which are considered safer.
Industry players say the situation has created a gap between financial institutions and small businesses, with many SMEs turning to informal sources of credit, including family loans and rotating savings groups.
While these options provide short-term relief, they often do not provide enough capital for expansion or modernisation.
Dr. Ayiku said the problem was affecting businesses across multiple sectors, including retail, food processing, transport services and small-scale manufacturing.
He noted that many entrepreneurs with viable business ideas were unable to grow simply because they lacked access to capital at the right time.
“Credit is not just about borrowing money. It is about growth, innovation and job creation. When SMEs cannot access credit, the whole economy feels the impact,” he said.
Some financial institutions have introduced SME-focused loan products in recent years, but business owners say the interest rates remain too high and repayment periods too short.
Others also complain about long approval processes, which make it difficult to respond quickly to business opportunities.
Dr. Ayiku believes the solution lies in improving financial literacy among SME owners while also encouraging banks to design more flexible financing products tailored to small businesses.
He said government-backed credit guarantee schemes could also help reduce the risk faced by banks and make loans more accessible.
He further called for stronger collaboration between financial institutions, business associations and training institutions to help SMEs improve record-keeping, build credit histories and become more bankable.
“If SMEs are supported properly, they can drive industrial growth, reduce unemployment and strengthen the local economy. But without access to credit, their potential will remain limited,” he said.
Dr. Ayiku added that addressing the financing gap for SMEs should be treated as a national economic priority, especially at a time when the country is looking to promote local production and reduce dependence on imports.
