THE RELEVANCE OF FINANCIAL MANAGEMENT TOOLS TO THE GROWTH OF SMALL AND MEDIUM SCALE ENTERPRISES (SMES) IN NIGERIA
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Date
2019
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International Journal of Economics, Commerce and Management
Abstract
Small and Medium Scale Enterprises (SMEs) are proved to be the backbone of all
developed and developing nations. The development of SME sector is of paramount
importance to any country irrespective of their level of development, since this sector has
great potential to generate maximum socio economic benefits to the country with minimum
level of investment. This study focuses on the Relevance of Financial Management Tools to
the Growth of Small and Medium Scale Enterprises in Nigeria. Five hypotheses were
formulated and tested. The primary data was obtained through the administration of
questionnaires. The result of the regression analysis and ANOVA used to test the
hypotheses indicates that financial management tools which includes profitability, effective
internal control, effective financial reporting, accounting record/documentation, and working
capital has significant impact on the growth of SMEs as shown by the result in the analysis.
However, only accurate record keeping and documentation has positive significance.
Therefore based on these findings, the study recommends that SMEs should make constant
effort to adopt the needed financial management tools since they have a positive influence
on the growth of SMEs. Further studies should explore increased data sets to confirm the
relevance of other variables.