Rural Banks Financing Of Small And Medium- Scale Enterprises
(SMEs): A Case Study Of Juaben Rural Bank
Gifty Boateng *, and Doris Akyere Boateng **
KNUST Business School *
Department of Social Work, University of Ghana, Legon **

Abstract:The main objective of this paper is to highlight the importance of Rural Banks in financing Small and Medium- scale Enterprises (SMEs) within Kumasi Metropolis of Ghana, taking cognizance of the contributions of Juaben Rural Bank Limited. In advanced economies, commercial banks are the main financiers of SMEs. However, in Ghana there are a number of macroeconomic, institutional and regulatory challenges that hinder commercial banks from lending to SMEs. In addition, SMEs have high failure rates which make commercial banks reluctant to extend credit to players of the sector. By administering a questionnaire to ninety (90) SME operators and ten (10) staff of Juaben Rural Bank, the paper finds that a lack of collateral security, poorly prepared accounts, poor financial history, limited years of operation, among others are some of the major challenges SMEs face in accessing loans from rural banks. In view of the findings, recommendations are made to the Bank of Ghana, policy makers and operators of SMEs.

Keywords: Rural Banks, Small and Medium Enterprises