The Role of Government Financial Assistance in Enhancing the Performance and Financial Sustainability of SMEs in Ghana: Implications for Economic Development

This study investigates how government financial assistance enhances the performance and sustainability of Ghanaian SMEs and its implications for economic growth. It examines whether such aid boosts income, profitability, and access to private financing. Using quantitative analysis and logit random-effects models, data from 59 firms over 2015–2020 (354 firm-year observations) reveal that government support significantly improves SME performance and credit access. Firm size, innovation, strategy, and industry conditions also influence outcomes. The findings suggest that government aid reduces information asymmetry, positioning the state as an impartial credit assessor and strengthening SME-driven economic development.