THE IMPACT OF RURAL BANKS IN DEVELOPING SMES IN SUNYANI MUNICIPALITY (A CASE STUDY OF FIAGYA RURAL BANK)

ABSTRACT The aim of this research was to examine the impact of Fiagya Rural Bank on SMEs profitability and growth. Through the stratified sampling method, a sample size of 156 respondents was selected to examine the impact of Fiagya Rural Bank on SMEs profitability and growth. The research design used in the study was descriptive research type. Data was collected through the administration of questionnaire. It was found out that overdraft and loans were the types of credit facilities available for SMEs in the Fiagya Rural Bank and these loans affect SMEs operating profit margin by increasing profit, speeding up operations, and making operational cost low. Additionally, loans and credit given by Fiagya Rural Bank to SMEs aids in expanding their businesses by securing raw materials on time, employ a lot of people, increase sales and growth rate. The findings also revealed a strong positive relationship between accessibility of credit and growth of SMEs. The study recommends that Fiagya rural bank should develop other special package for SMEs aside the overdraft and loans that they have been providing. Also, since loans and credit affect SMEs profitability and growth, Fiagya rural bank should increase the credit or loans allocated for SMEs