An Overview of SME Lending Characteristics in the Ghana Banking Industry Today

The banking industry of Ghana has gone through impressive changes of progress with regards to lending to Small Scale and Medium-size Enterprises. This is attributable to various features or characteristics adopted by the industry. The purpose of this paper is to unfold the characteristics of lending to Small Scale and Medium-size Enterprises in Ghana. The content analysis research design was used to probe into the financial statements and lending policies of banks in Ghana. The study indicates that the banking sector is characterized of high Small Scale and Medium-size Enterprises lending interests of banks. Lending to Small Scale and Medium-size Enterprises is driven by policies of lending criteria, which SMEs must meet to become eligible for credits. Though there is much flexibility in the lending criteria of banks, lending criteria of local banks are more flexible. It is recommended that foreign banks make their lending criteria flexible by reducing the number of criteria Small Scale and Medium-size Enterprises need to meet to become eligible for loans from them.