Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)


Environmental Factors and Financial Sustainability of SMEs in Sekondi-Takoradi, Ghana

Author(s): Albert Tchey Agbenyegah, Robert Amankwaa

SMEs are critical to every economic growth. However, between 60% and 80% of SMEs fail within 5 years of their establishment. This study was therefore aimed at finding out the level of SMEs’ financial sustainability and the environmental factors that influence the businesses’ financial sustainability in Sekondi-Takoradi. The study adopted quantitative design approach. Through convenient sampling technique, 250 SME owners from the metropolis were sampled for the study. The data collected were then analyzed using regression analysis and correlation. The study revealed that both internal and external factors significantly influenced SME' financial sustainability. However, while the internal factors have a positive influence on the financial sustainability of SMEs, the external factors have a negative influence on the financial sustainability of SME in Sekondi-Takoradi. Moreover, the study found the businesses to be financially sustainable (good to moderate extent). It was therefore recommended that SME owners in the metropolis should focus on maximizing the internal factors to compensate for the negative effect of the external factors to improve on their financial sustainability.

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