The Impact of Financial Engineering on Building Project Finance Among Commercial Banks in Ghana

¹Edward Domina Attafuah | ²David Ackah (PhD)

¹University Hospital, University of Development Studies (UDS Tamale, Ghana)

²UNEM International Programme, Universadad Empresarial de Costa Rica

Email:  edwardattafuah12@gmail.com  | drackah@ipmp.edu.gh

Abstract

Financial engineering activities are well-thought-out as the driving force behind business achievement and overall economic development. However, no research has been done on the impact of financial engineering on the financial performance of commercial banks in Ghana; This treatise sought to enhance the understanding of financial instruments used in project financing and the process of financial engineering. This treatise embraced a descriptive survey design which used a quantitative approach to amass data on the impact of financial engineering on building project finance among commercial banks in Ghana. The treatise concentrated on the banking industry with a spotlight on banks listed on Ghana Stock Exchange with operations in the Accra Metropolitan Assembly only, and both primary (questionnaire) and secondary (audited financial records) data were employed to analyse the treatise. The secondary data were analysed descriptively, while the analysed data were analysed proportionally. The regression technique was adopted to explore the relationship between financial engineering and building project finance. The results show a significant but negative association between the project finance market and project finance. Also, there was a powerful but positive association among the selected commercial banks between project finance instruments, market innovation and project finance. The treatise concludes that commercial banks in Ghana have adopted various financial engineering strategies to improve project finance and, by extension, financial performance. This treatise recommends that commercial banks in Ghana employ product innovation strategies such as product range extension, product replacement, product improvement, product repositioning and new product introduction to enable the banks to be more productive, grow faster, invest more and earn more profit.

Keywords: Financial Engineering, Credit Management Practices, Financial Administration, Building Project Finance

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