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Determinants of Loan Repayment Performance of Small and Medium Enterprises (SMEs) in Ghana: The Case of Asante Akyem Rural Bank

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  • Ahmed Tijani Salifu
  • Zakiya Tofik-Abu
  • M. Arifur Rahman
  • Mohammed Aminu Sualihu

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.

Suggested Citation

  • Ahmed Tijani Salifu & Zakiya Tofik-Abu & M. Arifur Rahman & Mohammed Aminu Sualihu, 2018. "Determinants of Loan Repayment Performance of Small and Medium Enterprises (SMEs) in Ghana: The Case of Asante Akyem Rural Bank," Journal of African Business, Taylor & Francis Journals, vol. 19(2), pages 279-296, April.
    • Handle: RePEc:taf:wjabxx:v:19:y:2018:i:2:p:279-296
    DOI: 10.1080/15228916.2018.1440460
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