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SME bank selection and patronage behaviour in the Ghanaian banking industry

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  • Bedman Narteh

Abstract

Purpose - – The paper aims to investigate small and medium-scale enterprises (SMEs) bank selection and patronage behaviour in the Ghanaian banking sector. Design/methodology/approach - – A detailed literature review was used to identify five determinants of bank selection and other patronage factors which were used to survey 503 SMEs randomly selected from the data base of the National Board for Small Scale Industries in Ghana. Exploratory factor analysis, multiple regression and correlation analysis were used for the data analysis. Findings - – The study found price competitiveness, credit availability, perceived service quality, staff attributes and bank attributes as determinants of SME bank selection. In addition, loans and overdrafts, cash collection, transfers, bank guarantees, advisory services and training were among the core services patronized by the SMEs. Practical implications - – The study highlights the importance of factors considered important to the SME bank selection and patronage behaviour. It thus provides practical leverage to banks on how to attract, serve and retain SMEs in Ghana. Originality/value - – The study is the first of its kind that investigated both bank selection and patronage behaviour at the same time and provides important insight for banks on how to attract, satisfy and manage SMEs. It also makes a major contribution to the literature on SME banking behaviour especially in a sub-Saharan Africa and responds to the recent call for more studies on SME practices in emerging economies.

Suggested Citation

  • Bedman Narteh, 2013. "SME bank selection and patronage behaviour in the Ghanaian banking industry," Management Research Review, Emerald Group Publishing Limited, vol. 36(11), pages 1061-1080, October.
  • Handle: RePEc:eme:mrrpps:v:36:y:2013:i:11:p:1061-1080
    DOI: 10.1108/MRR-06-2012-0147
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    Citations

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    Cited by:

    1. Harpreet Kaur & Sangeeta Arora, 2019. "Demographic influences on consumer decisions in the banking sector: evidence from India," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 24(3), pages 81-93, December.
    2. Obi Berko Obeng Damoah & Augustine Awuah Peprah, 2021. "Synthesis of small and medium enterprise research in Ghana," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 451-468, December.
    3. Manpreet Kaur & Kanwaljeet Singh & Sarita Arora, 2023. "Are SMEs relationship seekers or price watchers? Target marketing implications for banks," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(3), pages 615-625, September.
    4. Abdulaziz M. Abdulsaleh, 2016. "Factors Affecting Libyan SMEs’ Selection of Banks as Business Partners," Quarterly Journal of Business Studies, Research Academy of Social Sciences, vol. 2(4), pages 201-210.
    5. Bright Senanu & Bedman Narteh, 2023. "Banking sector reforms and customer switching intentions: evidence from the Ghanaian banking industry," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(1), pages 15-29, March.

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