Access to Credit: Experiences of Petty Traders in Ghana

Access to finance is a key determinant for business start-up, development and growth for small
businesses. This paper focused on the experiences of petty traders in accessing credit within Wa
Central in the Upper West Region of Ghana with a sample of eighty-one respondents for both the
questionnaire and the interview. The data collected was analysed using descriptive statistics, Pearson
correlation matrix and Kendall’s coefficient of concordance. Result revealed that in acquiring credit
from the financial institutions they demanded for security for the credit requested, though the petty
traders were given sufficient time for repayment they indicated that the financial institutions failed to
do effective monitoring and supervision of the usage of the credit given. The study showed evidence
that high interest rate charged and poor records keeping by petty traders were the challenges of
accessing loans. The Branch Manager during the interview revealed that giving credit to petty traders
is a challenge but they do it as part of their social responsibility to help eradicate poverty among the
small income earners and help grow and expand small businesses in the geographical area. The
paper suggests that petty traders must keep proper records, the need for financial institutions to
reconsider its stringent eligibility criteria for petty traders, finally policy makers must create an enabling
operating environment for micro enterprises to flourish.