ASSESSMENT OF THE FINANCIAL MANAGEMENT PRACTICES ADOPTED BY SMALL AND MEDIUM SCALE ENTERPRISES (SMEs) IN ANAMBRA STATE

Author: Okolo Juliana Ebele
Department: Vocational Education
Affiliation: Nnamdi Azikiwe University Awka

The purpose of this study was to assess the financial management practices adopted by small and medium scale enterprises (SMEs) in Anambra State. Specifically, the study covered the area of funds sourcing, funds allocation, control of funds and accounting records keeping of these enterprises. Four research questions guided the study and six null hypotheses were tested in the study. The population of the study was 2256 small and medium scale entrepreneurs who registered with the state ministry of commerce, Industry and Technology. A sample of 677 entrepreneurs made up of 426 small and 251 medium scale entrepreneurs in the three senatorial zones of Anambra State were used for the study. A 56 item questionnaire was used for data collection. The questionnaire was tested for validity and reliability coefficient of 0.64,0.70,0.71 and 0.73 were obtained for sub-sections (B1-B2) thus the Alpha coefficient stood at 0.76. Data collected were analyzed using descriptive statistics of mean to answer the research questions. Inferential statistics of one way analysis of variance (ANOVA) at 0.05 level of significance were used to test the hypotheses. The results showed that the extent of adoption of sundry fund sourcing avenue, sundry fund allocation practices, sundry control measures and sundry accounting record practices in managing the business finances by small and medium scale entrepreneurs in Anambra state were very low. Small and medium scale entrepreneurs do not differ significantly in their mean ratings on the extent they adopt sundry fund sourcing avenues to finance their businesses and sundry fund allocation practices as a result of their scale of business. Experienced and inexperienced medium scale entrepreneurs do not differ significantly in their mean ratings on the extent they adopt sundry fund allocation practices in their enterprises. Based on the findings, the researcher recommended among others; that small and medium scale entrepreneurs in Anambra state should make concerted efforts to adopt financial management practices identified by this study to enable them acquire enough funds, manage and control the funds adequately for functional business operations and expansions.

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