Ultimately, both government and the private sectors of the economy and the society need to be involved in the industrial development process of the nation, Ghana. One of the approaches to the challenges of development in the country is the encouragement of entrepreneurial development leslies. It is accepted that Seems is the engine for economic growth and promoting equitable development. There is a theoretical believe that private sector development is the surest way of developing the micro economic sector. Micro finance banks are one of the sources of finances of the small and medium scale enterprises in the Ghanaian economy.
The effectiveness of this source of funding leaves many questions unanswered 1 . Supervision of a large number of Rural Micro finance Institutions (Armfuls) is costly relative to their potential impact on the financial system (about 7% of assets), and the Bank of Ghana has adopted a number of strategies to cope with its limited supervision capacity: raising reserve requirement for Rural Community Banks (Arcs) to as high as 62%. , drastically raising the Africa Region Working Paper Series NINE, June 2003 11 minimum capital requirement for Non Banking Financial Institutions (NBS). , permitting agglutination of credit unions by their apex body.
It is currently establishing an Apex Bank to serve the Arcs, link them more effectively to the commercial banking system, and take the lead in building their capacity and, eventually, in undertaking front-line supervision. Although the SIS$2 million minimum capital requirement makes the savings and loans (S&Ls) less accessible for NAG transformation, it has led to introduction of foreign capital (Africa Region Working Micro finance banks are one of the major threads that potentially could be weaved tightly to ensure the formation and survival of small and medium scale enterprises in the country.
The vibrancy of the Seems depend to some extent what is needed to support the creation and expansion of the enterprises’ e. G. Funding, policy regulation and legal environment, I. E. Inexpensive, fast and free from corruption (UNDO report, 2003). There is therefore the need to conceptualize the potential impacts of these banks on the development of small and medium scale enterprises. Increasing the access of the poor to sustainable financial services is an important part of the World Bank Africa Region’s strategy for supporting the Millennium Development Goals for poverty reduction.
Convenient and affordable instruments for savings, credit, insurance, and payment transfers are essential both to cope with the economic fluctuations and risks that make the poor especially vulnerable and to take advantage of opportunities to acquire productive assets and skills that can generate increased income. Micromanage is the application of innovative methodologies that make such financial services available to relatively poor households and 12 misinterpreted in small transactions suited to their conditions.
Innovative micromanage institutions have had substantial success in making financial services accessible to the poor in many parts of the world, and micromanage is increasingly provided through licensed, commercial financial institutions capable of monopolizing the funds necessary to significantly increase the scale of outreach (African Region Working Paper Series, 2003). . 2 Problem Statement The Northern Region has valuable natural resources for a strong agricultural development and product distribution.
This resource base should provide the economic space for the development of rural Seems, and contribute to the country fight against underdevelopment. Business development, however, requires more than natural resources, and it is not clear what challenges and opportunities in development of rural Seems are facing in Tamale. What market alternatives are available? Is there sufficient access to labor skills and resources? Do Seems have access to financial capital to fund their operations?
This study will investigate the impact of micromanage banks in the development of small and medium enterprises. Particular attention would be given to the issue of financing enterprise development, where the major micromanage institution in Tamale plays a key role. Micromanage banks has for some years now, aimed to support Seems in the Tamale Metropolis with micro financing, but it is unclear whether their administrative practices support their efforts or create additional challenges for rural enterprises in need of financing for he development of their businesses.
The specific questions that shall guide the research in this project are: ; Do Seems have access to financial capital to fund their operations? Are micromanage institutions providing funding to developing Seems in Tamale metropolitan assembly in an acceptable way and on reasonable conditions? 1. 4 Objectives of Research 1. 4. 1 Main objectives This study is intend to interrogate the problems and opportunities that small and medium enterprises face in assessing funds for their development efforts, with a particular interest in the role that micro- insane institutions could be playing.
In addition to gaining a more universal picture of the challenges facing developing Seems, the study will identify how micro financial institutions are contributing to the development of rural small and medium scale enterprises and why Seems succeed or fail in their efforts to acquire financing for their development. This study is focused on the resource needs of developing rural small and medium size enterprises, and how micro finance has contributed to rural enterprise development. Thus the sustainable development of small and medium call enterprises in Tamale Metropolitan assembly. . 4. 2 Specific Objectives The specific objectives in this study are: ; To investigate the extent to which micromanage banks helps its clients in developing their small or medium size businesses. ; To find out whether micromanage banks clients feel they have reasonable and fair access to micro financing. ; Find out whether rates of interest charged by Mobs are reasonable to promote the growth of Seems in the Tamale Metropolitan Assembly. 14 1. 5 Research Questions ; ; ; What are the benefits of micromanage banks to Seems?
Do coordinate banks deal fairly with their members? Does interest charges of micromanage banks reasonable enough to promote development of Seems? 1. 6 Significance/Justification of Study In trying to Justify why the current study is relevant, it is of enormous relevance to mention that researchers have found this segment of study very important to the development of the socioeconomic activities in developing countries and their contributions to the development of small and medium size businesses in Ghana.
