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We examine the role of a typical set of determinants of loan repayment performance of SMEs in the context of a rural bank’s setting in Ghana. Our analysis using survey data suggests that, while higher application cost, loan size and interest rate exert significantly negative influence on loan repayment, higher educational background of the SME operators is associated with significantly better repayment performance. Interestingly, in comparison with those with only primary-level education, SME operators with tertiary education register the best repayment performance followed by those with secondary education. We provide detailed discussion and managerial implications of these findings. [ABSTRACT FROM AUTHOR]

Does bank size significantly explain the variations in bank stability? Does bank funding risk significantly impact bank stability? This paper addresses these two questions with data from the rural banking industry in Ghana. Controlling for credit risk, liquidity risk, diversification in the business model, profitability, inflation, financial structure and gross domestic product, the results suggest that an increase in the size of a rural bank results in an increase in its stability. The results also show that funding risk positively impacts bank stability. The positive relationship between size and bank stability has important repercussions for the current debate on whether or not to constrain bank size to insulate the financial system from future crisis. The positive relationship between funding risk and bank stability also has important implications for the current debate on funding of retail banks. [ABSTRACT FROM AUTHOR]

This paper analyzes the profitability of 112 rural banks (special unit banks created to promote rural financial intermediation in Ghana). The results generally show that bank size, funding risk, diversification, liquidity risk, and bank stability are significant predictors of rural bank profitability. Whereas an improvement in the funding risk of a rural bank in a particular period portends a drop in its profitability in the future, an improvement in the size, diversification, liquidity risk, and stability of a rural bank signifies an improvement in the future profitability of the bank. [ABSTRACT FROM AUTHOR]