Formal property titles or more? Perspectives from Ghana's financial institutions

  • Daniel Domeher
  • Eric Yeboah
  • Florence Ellis
Keywords: Access to credit, Dead capital, Financial institutions, Formal property title, SMEs.


The dead capital thesis of de Soto has raised a lot of debate on the  relationship between formal property titles and access to credit. Various authors have argued that overconcentration of policy efforts on providing formal property titles could be overly simplistic. The argument has largely been made along the logic espoused in the ‘dead capital theses’. However, more than a formal title is required to access credit from formal financial institutions by small businesses. The aim of this paper is to examine the critical factors inhibiting credit access by SMEs and assess the relative  importance of formal titles amongst the other factors responsible for the financing gap. Surveys were conducted amongst officials of various financial institutions using structured questionnaires. The data was analysed using factor analysis. The results show that formal lenders perceive the absence of formal property titles to be a factor inhibiting SMEs credit access albeit the exact effect is very marginal relative to other factors.

Keywords: Access to credit; Dead capital; Financial institutions; Formal
property title; SMEs.


Journal Identifiers

print ISSN: 2042-1478