Importance of Small and Mediun Entreptises in a Developing Economy

ID NUMBER 11060659 racetrack MANAGEMENT OF SMALL AND MEDIUM SCALE ENTERPRISES (SMEs) LECTURER MR. ADAMS FADIR-RAHMAN DATE 21-4-2010 research TO WHAT EXTENT DO CAN IT BE SAID THAT GHANA CANNOT aim WITHOUT THE ACTIVITIES OF SMEs OPERATORS Small and metier enterprises (SMEs) be companies whose headcount or turnover falls below certain limits. And the limit depends on the country in which the accompany is operating. SMEs contribute immensely to the sparing development of a country .And it squeeze out be said that a developing country like gold coast cannot develop without the contribution of SMEs due to the following reasons Firstly, SMEs contribute significantly to the grooming of productive employment opportunities for rural and urban growing labor draw and quarter in gold coast. The provision of employment opportunities increases the generation of income by the people . And when to the highest degree of the people in the country ar employed, it leads to the reduction of p overty.Secondly, they help to sidle up productive resources at all levels of the economy and add to the flexible economic system in which small and large firms are interlinked. Such linkages are very crucial for the attraction of alien investment. This is because the investing transnational corporations typeface for sound domestic suppliers for their supply chain. Thirdly, SMEs provide substitution for import goods which micturate competition and leads to production of quality goods at affordable prices.This is to say that the substitutes of imported goods produced in gold coast by SMEs helps to create competition between the SMEs and the unconnected producers. And this forces them to produce quality goods at affordable prices since there is competition. Furthermore, SMEs help in the provision of capital to individuals, other businesses and even the government. When the SMEs generate their income, they deposited them in the various(a) commercial banks in Ghana. It is from thes e funds that the banks advance loans to their needy customers.And these funds are sometimes loaned to the government to finance its developmental projects. Also, the income generated by the SMEs is subject to tax. so their returns are taxed for the development of the nation. These taxes, when collected, are used for the construction of roads, schools, hospitals and other affectionate amenities. More so, SMES help to produce and enhance the movement of goods after-school(prenominal) the country. They excessively help to the country to export its raw materials or natural resources to foreign countries for foreign exchange.And it also paves the way for some local goods to be marketed outside the country. And this help to increase the gross domestic product (GDP) and per capital income of the country. Lastly, some of the current larger enterprises have their origin in small and medium enterprises. This is to say that most of the large scale enterprises in Ghana were SMEs forrader their current state. SMEs are different from large scale enterprises in deuce-ace main aspects uncertainty, innovation and evolution. Therefore we can say that SMEs are the commencement point of development in the Ghanaian economy towards industrialization.In a nutshell, judging from above, we can see that there is no way that Ghana can develop without the operations of SMEs. So what is required is for the government of Ghana to pursue the precise policy and regulatory reforms to turn SMEs into an effective legal document for the enhancement of economic growth. REFERENCE SMALL AND MEDIUM SCALE ENTREPRISES,JONATHAN BLAY ,1993,CANADA grandness OF SMALL AND MEDIUM SCALE ENTREPRISES IN ECONOMIC DEVELOPMENT,BASHIR AHMED FIDA,PAKISTAN,2008. WWW. THEFREELIBRARY. COM