Determinants of SMEs Growth in the Tamale Metropolis using logistic regression

Abstract

This paper examined the determinants of Small and Medium Enterprises (SMEs) growth in the Tamale Metropolis, Ghana using logistic regression. Growth was measured based on three key performance indicators of gross profits, employment and asset levels.Logistic regressions were estimated to identify the determinants of growth for each of the performance indicators. A survey was conducted on 199 women owned enterprises in the Tamale Metropolis of Ghana that had accessed micro credit from 2010 - 2014. The relationship between the performance indicators and a set of explanatory variables grouped into entrepreneur characteristics, business profile, loan and banking profile and enterprise size were considered. The results showed that entrepreneur characteristics and business profile significantly predicts the growth in gross profits of the SMEs. Specifically the person(s) put in charge of the day-to-day running of the business enterprise had a significant relationship with the growth in gross profit of the enterprise at the 1% significance level whilst household size of entrepreneur was significant at the 5% level. However, employment and asset growth were not significantly predicted by the explanatory variables at both the 1 and 5 % levels.