The Impact of the Ghana Alternative Market (GAX) on the Financial Performance of Small and Medium Enterprise (SME) Sector in Ghana; A Case Study of IZWE Loans Limited

The Impact of the Ghana Alternative Market (GAX) on the Financial Performance of Small and Medium Enterprise (SME) Sector in Ghana; A Case Study of IZWE Loans Limited

Baffour Kwakye Agyarko

The dissertation evaluated the impact of Ghana Alternative Exchange Market (“GAX”) on the financial performance of Small and Medium Enterprises (“SMEs”) in Ghana using Izwe Loans Limited (“Izwe Loans”) as the case under study. In assessing impact of growth, the research undertook a descriptive statistics evaluation of five key financial performance indicators and interpreted the outcome. The study first and foremost described the emergence of alternative exchanges in other jurisdictions across the globe specifically in Europe, Asia and other African countries in a bid to resolve challenges SMEs or small businesses face in assessing funds from the capital market to finance their operations. Further, an overview of SMEs and the important role they play in economic development of nations was also highlighted citing access to finance as a major constraint they face. Theoretical and empirical review of literature related to this thesis were also evaluated and research gaps pointed out. To satisfy the research hypothesis of whether or not the GAX has had any effect on the growth of Izwe Loans, this study adopted both trend analysis to examine the trends in the financial performance of Izwe Loans and repeated measure multivariate analysis of variance (one-way rMANOVA) to estimate the model. From the trend analysis, it was found that, Izwe Loans recorded its lowest figures in 2014 having recorded fluctuating figures in 2012 and 2013. Three of the five performance indicators examined however began to rise steadily in 2015 and 2016. Inferring from the descriptive statistics results, only two ratios return on asset and return on equity recorded any significant improvement in financial performance post the GAX listing. The other three indicators, Net Interest Margin, Operating Profit Margin and Net Profit Margin did not post any significant improvement after the GAX listing. The conclusion of the study was that, the GAX has had some positive impact on Izwe Loans in terms of ROE and ROA but further studies on the GAX and listed SMEs need to carried when more data is available to re-assess its impact on the listed companies.
Keywords:
GAX, SME, Listing, Financing, Funding, Impact

MBA FINANCE

January 2018

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