The role of leasing as an option for financing capital assets of Small Medium Enterprises (SMEs) in Ghana

Abstract

SMEs are the catalysts for economic growth in most countries in terms of productive capacity, thus the underlying goal of this study is to investigate the role of leasing in the Ghanaian economy with respect to SME's. A simple random sampling technique was used by the researcher to select 85 Lessees and 6 Lessors who were involved in the research sample. In order to acquire related data towards achieving the objectives of the study, the researcher further used a designed questionnaire to aid in analysing the data. Descriptive statistics involving simple percentage information in the form of a table and illustrations was applied in the data presentation and analysis. The findings of the study reveal that a significant number of the SM Es will benefit from leasing even though only few of them were capable of securing the required amount needed. Interestingly, the majority of the SMEs acknowledge positive contributions through leasing towards increasing their returns and sales thus placing them in the competitive arena. It is recommended that leasing should be more attractive to SMEs as an alternative means of obtaining capital assets for their operations. In addition, the tax rate and interest rate should be reviewed in order to lessen the cost burden on the use of leasing by SMEs in Ghana.