Receivables Financing Industry

Leveraging Regulatory Interventions in the Receivables Financing Industry to Stimulate the Growth of Small Businesses in Ghana

Francis Kofi Korankye-Sakyi
Lecturer, Faculty of Law, University of Cape Coast, Ghana

Olufemi Oluyeju
Senior Lecturer, Department of Public Law, School of Law, University of Venda, South Africa


Small and medium enterprises (SMEs) generally constitute about 92% of all registered companies in Ghana. Again, 85% of the SMEs in Ghana offer employment in the manufacturing sector alone to the citizens and contribute 75% to the GDP of Ghana. It is a no-brainer that capital constitutes the life wire for every business entity, especially for SMEs. Lack of funding has been a major obstacle to suppliers and other business enterprises in the supply chain and a core reason for most insolvency.
Given the challenging credit market today, receivables financing or factoring has become an indispensable financing vehicle for many enterprises, irrespective of their sizes. In addition, receivables finance or credit factoring serves as a better alternative to the traditional means of financing by allowing SMEs to achieve liquidity and solvency. In most developed countries, receivables financing has played a critical role in financing SMEs, and it has always received the support of governments and central banks, globally. In Ghana, however, an adequate and facilitative regulatory regime has not been developed to stimulate and regulate the business and practice of credit factoring compared to other countries across the globe. Thus, it is in this context that this article argues that one of the reasons why factoring has not been developed and leveraged as an alternative financing source by SMEs in Ghana is due to the absence of a specific and well-developed regulatory framework to regulate the receivables financing industry. This article, therefore, aims at identifying the regulatory gaps in the receivables financing industry in Ghana and then makes a compelling case for a robust, specific legal and regulatory regime to promote the industry in the country.

Cite as: Korankye-Sakyi and Oluyeju “Leveraging Regulatory Interventions in the Receivables Financing Industry to Stimulate the Growth of Small Businesses in Ghana” 2022 (36) Spec Juris 183–200

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