IMPROVING FINANCIAL MANAGEMENT PRACTICES OF SMALL SCALE ENTERPRISES FOR INCREASED PROFITABILITY IN NIGER STATE, NIGERIA

Abstract

The main purpose of this study was to determine ways of improving financial management practices of Small Scale Enterprises (SSEs) for increased profitability in Niger State, Nigeria. Six purposes and six research questions were raised for the study. A Descriptive survey design was adopted for the study. The population for the study was 205 respondents, made up of 8 university accounting lecturers, 54 polytechnic accounting lecturers and 143 professional accountants in Niger State. The entire population of 205 was studied because it was of a manageable size. A structured questionnaire developed by the researcher and titled, Financial Management Practices Improvement Questionnaire (FMPIQ) was used for data collection. The questionnaire was face-validated by five experts; three from the Department of Business Education, University of Nigeria, Nsukka; one from Department of Accounting, Ibrahim Badamasi Babangida University, Lapai, Niger State and one from Department of Entrepreneurship and Business studies, Federal University of Technology, Minna, Niger State. To determine the internal consistency of the questionnaire items, 30 copies of the questionnaire were administered to 30 respondents selected from university accounting lecturers, polytechnic accounting lecturers and professional accountants working in universities and polytechnics in Kogi State. The reliability coefficients obtained using Crunbach Alpha reliability method were .83, .82, .88, .72, .73, .89 for the six clusters of the questionnaire and .83 for the whole instrument. The instrument was administered through personal contact by the researcher with the help of 10 research assistants. Out of the 205 copies of the questionnaire administered, 197 were retrieved and analysed for the study. The data collected were analyzed, using mean and standard deviation to answer the six research questions while analysis of variance (ANOVA) statistic was used to test the six null hypotheses at 0.05 level of significance. The findings of the study included 12 ways of improving financial planning practices of Small Scale Enterprises for increased profitability and 10 ways of improving financial records keeping practices of Small Scale Enterprises for increased profitability in Niger State. It was recommended that, management of Small Scale Enterprises should adopt the ways of improving the financial management practices of Small Scale Enterprises as identified by the study for increased profitability in Niger State, and that government in conjunction with the relevant agencies should carry out enlightenment campaigns on the need for SSE operators to adopt appropriate financial management practices found by the study for increased profitability in Niger State, Nigeria.

 

CHAPTER ONE

INTRODUCTION

Background of the Study

Small Scale Enterprises (SSEs) play an important role in the economic growth and development of nations. SSEs play critical economic roles such as employment generation, revenue generation to government, provision of goods and services, serving as breeching ground for entrepreneurs, serving as training ground for local skills, reducing rural-urban migration and contribute meaningfully to the benefit of their owners and the economies of their host countries. The survival and profitability of SSEs is important to the economy because certain services are better and more efficiently provided at the level of these businesses. Their profitability can be achievable and determined through effective and efficient financial management practices by those saddled with the responsibility to oversee the operations of the SSEs. Agyei-Mensah (2012) stated that SSEs play critical roles in providing job opportunities, nurturing a culture of entrepreneurship and opening new business opportunities.

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Small Scale Enterprises have been variously defined by different authors which differs from one country to another, depending on the criteria used in each country. Some of the criteria used by most countries are number of employees and financial measures such as net profit, annual sales and balance sheet totals. Richards-Gustafson (2016) stated that Small Scale Enterprises generally have fewer than 500 employees in non-manufacturing industries in the United States while in Australia; a Small Scale Enterprise is one that has fewer than 15 employees on its payroll. Richards- Gustafson further stated that in Europe, the number of employees is 250. In the Asian countries, it is 100 employees or fewer. According to Bulunywa (2016), a Small Scale Enterprise in the United States may be a large business in India and a very large one in Uganda.

In Nigeria, there have also been various definitions of SSEs. Sunday (2011) stated that a simple definition of a Small Scale Enterprise could not be absolute and total because it changes with the economic development of the country. Sunday explained that in Nigeria, investment ceiling in machinery and equipment alone in small industry sector has been reviewed several times. For instance, in 1972, the limit was N50, 000, in 1973/75 period, it was raised to N60, 000 and during the third national development plan (1975-80), especially in 1977, it was raised to N150, 000 but currently, the official upper limit set by the federal government of Nigeria is N20 million but without emphasizing the maximum number of employees which was set at 49 in 1972. Sunday further explained that in 1996, the National Council on Industry defined a small enterprise as that with total cost (including working capital but excluding cost of land) of above N1 million, but not exceeding N40 million with labour size of between 11 and 35 workers. However, in the context of this study, a small scale enterprise is that with a total cost of between N500, 000 and N50 million, with a labour size of between 2 and 49 employees.

All over the world, the important role played by Small Scale Enterprises has been severally acknowledged. Kofi, Collins, Adjel and Christian (2014), stated that SSEs are regarded as an integral part of any nation’s economic activity and it is believed that as they grow and expand, the economy also grows. Small Scale Enterprises are seen as the bedrock of the industrial development of many countries of the world, including Nigeria. They have a big potential to bring about social and economic development by contributing significantly to employment generation of many countries, developed and developing countries alike (Egbuna and Agali, 2013). According to the Small and Medium Enterprises Development Agency of Nigeria (2013), Small Scale Enterprises play a pivotal role that goes beyond job creation. They are growth-supporting sector, that not only contributes significantly to improve people’s living standard, but also bring substantial local capital formation and are responsible for driving innovation and competition in developing economies of the world. Ariyo (2016) emphasized that if Nigeria is to reach its full potential in economic and social development, it cannot afford to ignore the contributions of Small Scale Enterprises in the country’s economic development. Small Scale Enterprises, like any other size of businesses, exist mainly to maximize profits, and no business venture is worth going into if it will not be profitable.

Profitability in relation to this study is the ability of a SSE to earn reasonable returns on its investment in order to survive and remain competitive. Hosfstrand (2009) stated that profitability is the primary goal of any business venture. The author explained that without profitability, no business will survive in the long run. Hosfstrand further explained that the profitability of a firm is measured with income and expenses. Income is the money generated from the activities of the firm while expenses are the cost of resources used up or consumed by the activities of the business. Small Scale Enterprises owners/operators, like owners of other sizes of business, therefore, commit their resources into business ventures to maximize profits and contribute to the general economic development of the host countries. The contribution of SSEs to the economic growth and development of Nigeria requires that no effort should be spared in identifying ways of improving the profitability of Small Scale Enterprises through enhanced financial management practices.

The success of these firms, like that of any other forms of business, depends largely on how effectively and efficiently their financial resources are managed. Researches indicated that most Small Scale Enterprises (SSEs) do not give adequate attention to proper or effective financial management. Kofi, et al (2014), stated that small businesses often face many problems such as poor accounting procedures, under pricing of products or services and the wrong assumption that an expert in a given technical field could also be an expert in another field but the key cause of their bankruptcies is mismanagement of funds. The authors stated that financial management is critical to the survival of every business venture because it has a direct link with the profitability of firms. Okafor (2012), also noted that the process of sourcing funds as well as the effective utilization and effective management of the funds are still the major challenges facing small firms in Nigeria, and that the challenges need proactive attention. Chris-Aladun (2013), stated that 80% of SSEs in Nigeria fail within five years of existence due to lack of experience and other bad business practices. Emmanuel and Puke (2015) also noted that about 75% of SSEs in Nigeria become insolvent within the first five years of their existence. Emmanuel and Puke stated that this may have been caused largely by poor management of the finances of enterprises. Effective and efficient financial management is, therefore, critical to the survival of SSEs.

Financial management is the proper sourcing and utilization of finances of a business in such a manner to attain or achieve set objectives of the business (Abanis, Sunday, Burani and Eliabu, 2013). Vitze (2016), stated that financial management is concerned with the planning, directing, organizing and controlling of a firm’s financial resources in order to achieve the intended objectives. The above definitions point to the fact that financial management has to do with judicious use of financial resources of the firm. The financial management of a business involves financial planning, financial control, financial record keeping, project financing, financial investment decisions and financial reporting practices employed by the business.

Financial planning is the technique used by firms to manage their financial resources. Beniwal (2012) stated that financial planning is the process of determining how goals are to be attained through proper management of finances and it provides direction and meaning to financial decisions. Harvey (2012) also stated that financial planning is the process of determining the financial needs and goals (short and long-terms) of a firm for the future and the means to achieve them. King (2007) noted that lack of financial planning is often the fundamental problem of most Small Scale Enterprises. The question is whether Small Scale Enterprises are doing well in financial planning. This involves estimating financial needs of the enterprise ahead, data gathering, estimating future expenses, and identifying sources of finance among others. However, Okafor (2012) stated that the key tasks which are more fundamental to the survival and performance of the SSEs (such as financial decision making involving budgeting processes and planning) are completely ignored, downplayed or not properly done. After the necessary financial policies have been set by the management of the firm, the next step is to put the necessary control measures and procedures in place to ensure that plans are carried out accordingly through financial control.

Financial control is another variable in financial management which is essential in managing the affairs of any form of business (including Small Scale Enterprises). According to Wakiriba, Ngahu and Wagoki, (2014), financial controls are the procedures designed to protect assets and ensure that all financial transactions are recorded to prevent and reduce errors and fraud. The goal of putting in place a sound financial control system is to enable the organization achieve its objectives, safeguard assets and records, and evaluate operational efficiency. The authors further explained that effective financial control including maintenance of proper accounting records help managers to ensure that the entity is not unnecessarily exposed to financial risks and that the financial information is used only within the business.

Effective financial control measures can improve the performance of a business. On the other hand, ineffective financial control can have negative consequences for the enterprise. Ajonbadi, Lawal, Badmus and Okokiti (2014) stated that the small business subsector is characterized by high rate of failure that can be reduced if owners of these businesses put in place effective financial control tools (such as regular preparation of financial reports to determine the financial health of the enterprise, proper allocation and segregation of duties among employees, proper monitoring of expenses, rotating jobs among employees among others) that bring about meaningful organizational performance.

In the view of Nathamson (2016), financial control procedures include segregation of duties, non-delegation of signing of cheques to anybody, all payments being supported by invoices. Chijoke and Ukoji (2016) also gave some of the needed financial control measures that can be put in place by firms to include: sound accounting system, supporting all goods issued/supplied with authorized notes or local purchase orders (LPOs), making payments with crossed cheques and segregating duties among employees. However, Okafor (2012), stated that accounting expertise is low among small firms in Nigeria. Logically, if accounting expertise is low among owners of SSEs in Nigeria, it means that the financial control practices of these firms would be faulty because a sound accounting system is one of the ingredients of a sound internal control system. For instance, where the financial transactions of a Small Scale Enterprise are mixed up with the personal financial transactions of the owner or owners, effective financial control cannot be achieved. Agwu and Emeti (2014) identified inability to separate business finances from personal finances of owners as one of the factors leading to premature death of Small Enterprises in Nigeria. The financial controls that exist in an organization can be effective if records of the organization’s financial transactions are properly kept and maintained.

Financial records keeping is very important in running the affairs of any business (whether Small, Medium or Large). This is because it makes the preparation of financial reports possible, thereby enabling the owner or owners understand the progress of the business. Proper and adequate keeping of records of financial transactions of the business is in the best interest of the firm. According to European Union Regional Development Fund (2016), the success of a business rests on good record keeping practices because its financial condition or profitability cannot be ascertained without such records. Similarly, Dawuda and Azeke (2015) observed that in the competitive and changing business environment, good records keeping practices enable a business organization to plan properly and also cheek for misappropriation of resources of the organization. According to the authors, poor records keeping or non-availability of financial records will lead to resource mismanagement, and ultimately, to the failure of the business. Poor records keeping makes it difficult to differentiate between business transactions and personal transactions of the owner or owners, especially in small scale businesses which are in most cases managed by the owner. According to Abdul-Rahamon and Adejare (2014), some SSE owners do not give due attention to book keepings in relation to their business transactions despite its importance in the success of business performance.

The practice in Niger state was not any different. An interview with the Director (Research, Planning and Statistics) in the state Ministry of Investment, Commerce and Cooperatives revealed that most SSE owners in the state did not keep proper records of their transactions or prepare financial reports, and where they attempted to do so, they were not in the standard format. This was due to the fact that they possessed inadequate knowledge to do so. The director further stated that there was need for sensitization and advocacy to enlighten owners of Small Scale Enterprises in the state on the need and importance of keeping proper records and preparing reports of financial transactions. Similarly, an interview with a director in the Niger State Small Enterprises Agency (2016) recorded that the rate of failure among Small Scale Enterprises in the state was high. The director explained that apart from the failures known, many SSEs in the state had failed unnoticed. This may have been caused by the use of inappropriate financial management practices. Kennedy and Trailers (2015), listed some of the needed records to be kept by a business to include: copies of invoices and receipts for goods sold or services rendered, invoices of goods and services received from other business organizations, records of payment to employees and other organizations on behalf of employees and financial statements. Other financial records a business should keep are bank accounts documents such as cheques, credit cards, bank reconciliation statements and contract records if the business is involved in provision of services (Fontinelle, 2016).

Furthermore, apart from proper record keeping of financial transactions, an effective financial management practice should involve proper financing of activities/projects. The International Project Finance Association (2016) defined project financing as the financing of industrial projects where project debt and equity used to finance the project are paid back from cash flows generated by the project. Adigwe, (2012) also defined project financing as the method of acquiring capital funds and other related tools for financing planned activities of the business which will generate profit from which the procured fund will be liquidated. Small Scale Enterprises owners, like owners of other forms of business at one time or the other would need funds either for the purpose of expanding their businesses, purchase of equipment or plant, or for the day–to–day running of their businesses.

The prevailing practice by most owners of SSEs in Nigeria is to seek for funds both from informal and formal sources such as commercial banks and microfinance banks. Small Scale Enterprises also source a greater percentage of their funds from relations, friends, money lenders among others. According to Adigwe (2012), the banks ask for collateral and other conditions before extending credit facilities to Small Enterprises in Nigeria which most of the SSEs can not meet due to the smallness of their properties. On the other hand, these firms also possess inadequate managerial knowledge to effectively manage funds at their disposal. Ogboru (2007) noted that it is typical of SSEs in Africa to be deficient in business track records and collateral to meet the existing lending conditions of risk averse institutions, thereby creating “financing gap”. Consequently, the practice by some SSEs owners is to resort to the informal sector sources to finance their operations. According to Gbandi and Amissah (2014), the informal sector consists of institutions such as money lenders, landlords, relatives, friends, credit and savings associations among others. Adopting appropriate strategies that would be suggested by this study would help.

However, Small Scale Enterprises also have their own share of the blame for their inability to access credit facilities from banks and other financial institutions. Researches, however, showed that some of the operators did not adopt appropriate practices with regards to their financing needs. For instance, a survey sponsored by the German Technical Corporation in Niger State (2014) revealed that some owners of these firms had no business bank accounts with banks. This practice could make it difficult, if not impossible, for any financial institution to extend loan facilities to such businesses. Another wrong practice was that some SSE owners who were able to obtain financial facilities diverted them to other uses instead of using them for expanding their businesses. Stevens Consulting Ltd (2012), in a report it submitted to UNDP Outcome Office in Minna indicated that some owners of these enterprises in the state diverted funds obtained for business purposes to other uses, especially the male owners, and this created problems in the repayment process. The proper thing is that the facilities should be invested in the business to generate profit from which the facilities should be repaid. Proper financial investment decision of the SSEs became important in this regard.

Financial investment has to do with commitment of funds to acquire financial instruments or other assets in order to gain profitable return. Financial investment is the expenditure of fund on real assets such as factories, land, capital goods, and inventories among others (Agu, 2015). The services of professional accountants are critical in this regard. They can offer advice on profitable options, evaluation of investment projects or even facilitate the processes involved. However, most SSEs owners in Nigeria do not employ such experts because of the huge amount that can be spent on them by way of salaries and allowances. Okafor (2012), lamented that some SSE owners even feel that the services of qualified accountants can be simply dispensed with. This is a wrong line of reasoning, because most SSE owners do not possess adequate knowledge to reach and take investment decisions. In the same vein, an interview with the Director, (Planning, Research and Statistics) in the Niger State Ministry of Investment, Commerce and Cooperatives revealed that most SSE owners in the state rarely invest their surpluses outside their own businesses. Another wrong practice is improper reporting of accounting information to stakeholders and other users.

Financial reporting is needed to inform the owners and other users of financial reports about the performance of the business. Financial reporting is the process of producing financial statements that show the financial status of a business to management, owners, investors and regulatory authorities or agencies (Rouse, 2016). Financial reporting is achieved by means of financial statements which include the income statement showing the income and expenses, and profit or loss for a given period, the balance sheet which shows the financial position of the business, cash flow statement showing sources of funds and how they have been used and statement of changes in equity, especially for large firms engaged in manufacturing activities (Afolabi, 2013).

Many SSEs owners in Nigeria do not employ appropriate practices for preparing financial statements and where they attempt doing so, the reports are not properly done. According to Ikem, Chidi and Titus (2012), effective financial management can only be possible in the presence of quality accounting information. Ikem, Chidi and Titus (2012) further explained that Small Scale Enterprises in Nigeria (including Niger state) have poor accounting practices. Poor accounting practices by implication, mean poor financial reporting practices because accounting function cannot be separated from financial reporting function. Separating business and personal finances and using professional accountants among others can help.

The proper management of these variables (financial planning, financial control, financial records keeping, project financing, financial investment decisions and financial reporting) are the key success factors in the financial management practices of all forms of business enterprises, irrespective of whether they are small, medium or large. For Small Scale Enterprises to improve their financial management practices, it is necessary to find out from experts such as university accounting lecturers, polytechnic accounting lecturers as well as professional accountants on how this can be achieved.

An accounting lecturer could be an employee of a university, polytechnic or college of education whose work schedule is mainly teaching and research. According to Chester University (2017), an accounting lecturer is a person employed to teach in the area of accounting and finance in the higher education sector. Accounting lecturer, in the context of this study, is an academic staff employed to teach accounting and other related courses such as auditing, taxation, finance and financial management in a university, polytechnic or college of education. An accounting lecturer is usually a holder of bachelors degree or its equivalent in accounting and relevant postgraduate degrees. The person should have a good mastery of various aspects of accounting such as financial accounting, cost accounting and management accounting. The person should also have professional knowledge, skills and attributes required for proper management of business finance. This study solicited the expert opinions of accounting lecturers in universities accounting lecturers in polytechnics as well as professional accountants in Niger state to accomplish its objectives.

The choice of university accounting lecturers and polytechnic accounting lecturers was based on the fact that they are more practically in touch with the financial and business sub-sectors of the economy. Infact, they produce manpower for the subsectors. Having university accounting lecturers and polytechnic accounting lecturers as two separate groups to make three groups was based on the ground that they are exposed to different course content. The researcher wanted to know whether this fact could make them see things differently as related to financial management practices of SSEs. On the other hand, the exclusion of colleges of education was not on any ground of inferiority but based on the fact that they belong to an entirely different sector and therefore, would not be as conversant with the happenings practically in the financial and business sub-sectors. This researcher came from that background and therefore, could not afford to see COEs as inferior.

On the other hand, a professional accountant is a person who has acquired qualifications specified by a professional accountancy body. The International Financial Accounting Council (2011) defined a professional accounting as that person who has experience in the field of accountancy, achieved through formal education and practical experience, can demonstrate and maintain competence and prepared to comply with a code of ethics. A professional accountant is that person who has acquired professional qualifications from professional accountancy bodies such as the Institute of Chartered Accountants of Nigeria (ICAN), and Association of National Accountants of Nigeria (ANAN). The professional accountant holds the professional qualification in addition to other academic degrees and certificates obtained from tertiary institutions. A professional accountant in relation to this study, is that individual who has undergone training in accounting in a recognized institution, passed professional accounting examinations and is certified by a recognized professional accountancy body. The person should be knowledgeable and skilled in accounting matters, including financial management. The professional accountant in most cases may be an employee of a commercial bank, microfinance bank, industry, government ministry, department, parastatal, or any other organizations where accounting services are performed. The person’s experience is very relevant in this study because the person is directly involved in the financial management of businesses and other organizations.

It had been observed that many SSEs in Niger state had collapsed. The report by Stevens Consulting Ltd on Access to Finance by Microfinance Banks in Niger State submitted to the United Nations Development Programme (UNDP) Office in Minna, in 2012 stated that many small business owners in the state, especially the males, did not use their loan facilities for the purpose of running or expanding their businesses but diverted them to personal uses. According to the report, this action made the repayment of such facilities very difficult. In the same vein, a survey in Niger State, sponsored by the German Technical Corporation (2014), also showed that many SSEs owners in the state did not operate business bank accounts with financial institutions.

The economy of Niger State is characterized by micro and Small Scale Enterprises but this study was concerned only with SSEs in the state. Medium and Large business enterprises are few in the state. The director (Planning, Research and Statistics) in the Niger State Ministry of Investment Commerce and Cooperatives disclosed in an interview with the researcher on 3^rd July, 2017 that there are over 10,000 of such businesses in the state. The Small Scale Enterprises in the state generated greater percentage of business benefits in terms of employment generation, revenue generation to the state government and provision of goods and services. They could be found in both urban and rural areas of the state. However, for the success and survival of SSEs in the state, there was need to proffer solutions to their financial management problems. This study, therefore sought to find out the ways by which the financial management practices of SSEs in Niger State could be improved for increased profitability.

Statement of the Problem

Despite the important role played by Small Scale Enterprises in the economic growth and development of Nigeria, the sub-sector faces challenges bordering on inefficient financial management practices. It is an undisputable fact that the profitability of any business enterprise vis-à-vis Small Scale Enterprise (SSE) depends largely on the manner in which its financial resources are managed. Poor management of the financial resources of an enterprise will ultimately have a negative impact on its profitability while an efficient and effective management of such resources will impact positively on the profitability of the firm. However, Small Scale Enterprises often seem to possess inadequate knowledge in financial management such as in the areas of financial planning, financial control, keeping of appropriate financial records, project financing, financial investment decisions and financial reporting operations of the businesses. Adopting suggestions that would be made in this study would help SSEs to improve in these variables. Small Scale Enterprises have always had a relatively large percentage of failures and mishaps which are the ultimate price of making wrong or poor financial decisions. In Niger State, it seemed that many Small Scale Enterprises did not manage their financial resources appropriately. According to a survey sponsored by the German Technical Corporation in 2014 which is a staunch supporter of the state government programmes on Small Scale Enterprises, many SSEs operators in the state did not operate business bank accounts with financial institutions in the state.

The implication of this was that such SSEs would not be able to benefit from loan facilities offered by the financial institutions, and would also be losing in terms of interest that their deposits with the financial institutions could have earned. Reports indicated that some of those SSE operators that operated bank accounts and enjoyed loan facilities from financial institutions did not use such facilities to run or expand their businesses. For instance, the Report on Access to Finance from Microfinance Banks in Niger State (2012) revealed that some male owners of SSEs in the state who benefited from loan facilities diverted them to other uses instead of using them for business proposes. This, according to the report, created a lot of problems in the repayment process. Furthermore, an interview by the researcher with the Director (Planning, Research and Statistics) in the Niger State Ministry of Investment, Commerce and Cooperatives on 16^th June, 2016, also recorded that there were challenges of financial records keeping and financial reporting among SSE operators in the state due to inadequate knowledge. Similarly, a director in the state Small Scale Enterprises Agency disclosed in an interview with the researcher on 9^th November, 2016 that the rate of failure among SSEs in the state was high. According to the director, apart from the failures known, many SSEs in the state had collapsed unnoticed. The failures of these businesses meant loss of means of livelihood for their owners, loss of jobs by employees, loss of revenue to the state government and the negative effects on the society. This sad situation might have been caused by the use of wrong financial management practices by the owners. It was, therefore, against this background, that the study sought to identify ways of improving financial management practices of Small Scale Enterprises for increased profitability in Niger State.

Purpose of the Study

The general purpose of this study was to determine ways of improving financial management practices of Small Scale Enterprises for increasing profitability in Niger State, Nigeria. Specifically, the study determined ways of improving the:

1. Financial planning practices of Small Scale Enterprises for increased profitability.
2. Financial control practices of Small Scale Enterprises for increased profitability.
3. Financial records keeping practices of Small Scale Enterprises for increased profitability.
4. Project financing practices of Small Scale Enterprises for increased profitability.
5. Financial investment decisions practices of Small Scale Enterprises for increased profitability.
6. Financial reporting practices of Small Scale Enterprises for increased profitability.

Significance of the Study

The findings of this study would be of immense benefit to management of Small Scale Enterprises, agencies in charge of Small Scale Enterprises at all levels of government, prospective researchers, Associations of Small Scale Enterprises, other forms of businesses (such as medium and large) and Chambers of Commerce and Industry.

The findings of this study would be of benefit to management of Small Scale Enterprises. The management of SSEs, through the findings of the study would become aware of the appropriate means of improving their financial management practices. The SSEs operators would now use the findings of the study to effectively and efficiently manage their financial resources and thereby, improve and increase their profitability.

The findings of the study would also be of value to agencies in charge of Small Scale Enterprises at all levels of government. It would be proper for such agencies to organize training programmes for new and prospective Small Scale Enterprise operators. Such training programmes would improve the efficiency and effectiveness in the management of financial resources of SSEs and by extension, increase their profitability.

Furthermore, the findings of the study would be of benefit to prospective researchers in similar areas. Since research is a continuous process, future research efforts in financial management or any other related field would find the results of the study useful as source of materials for further research. This would help in facilitating and adding value to their works.

Associations or umbrella bodies of Small Scale Enterprises and Chambers of Commerce and Industry would also benefit from the findings of the study. One of the duties of such bodies is to enlighten and encourage their members to embrace best practices in running the affairs of their businesses. It was therefore, hoped that organizations such as the National Council on Industry and Nigeria Association of Small Scale Industries would encourage SSE operators to adopt the suggestions that the study would make to improve their financial management practices and increase profitability.

Other forms of businesses such as medium and large scale enterprises would also benefit from the findings of the study. Businesses may differ but there are certain things which one business may learn from another irrespective of size. One of such things is the techniques needed for successful management of financial resources. Therefore, other forms of businesses would find the results of the study valuable by adopting some of the suggestions that would be offered by the study to equally improve their financial management practices and increase their own profitability too.

Research Questions

The following research questions guided the study:

1. What are the ways of improving the financial planning practices of Small Scale Enterprises for increased profitability in Niger state, Nigeria?
2. What are the ways of improving the financial control practices of Small Scale Enterprises for increased profitability?
3. What are the ways of improving the financial records keeping practices of the Small Scale Enterprises of increased profitability?
4. What are the ways of improving the project financing practices of the Small Scale Enterprises for increased profitability?
5. What are the ways of improving the financial investment decisions practices of the Small Scale Enterprises of increased profitability?
6. What are the ways of improving the financial reporting practices of the Small Scale Enterprises for increased profitability?

Null Hypotheses

The following null hypotheses were tested at 0.05 level of significance:

Ho₁:     There is no significant difference among the mean responses of university accounting lecturers, polytechnic accounting lecturers and professional accountants on ways of improving the financial planning practices of Small Scale Enterprises for increased profitability in Niger State.

Ho₂:      There is no significant difference among the mean responses of university accounting lecturers, polytechnic accounting lecturers and professional accountants on ways of improving the financial control practices of Small Scale Enterprises for increased profitability in Niger State.

Ho₃:      There is no significant difference among the mean responses of university accounting lecturers, polytechnic accounting lecturers and professional accountants on ways of improving financial records keeping practices of Small Scale Enterprises for increased profitability in Niger State.

Ho₄:      There is no significant difference among the mean responses of university accounting lecturers, polytechnic accounting lecturers and professional accountants on ways of improving project financing practices of Small Scale Enterprises for increased profitability in Niger State.

Ho₅:      There is no significant difference among the mean responses of university accounting lecturers, polytechnic accounting lecturers and professional accountants on ways of improving financial investment decisions practices of Small Scale Enterprises for increased profitability in Niger State.

Ho₆:      There is no significant difference among the mean responses of university accounting lecturers, polytechnic accounting lecturers and professional accountants on ways of improving financial reporting practices of Small Scale Enterprises for increased profitability in Niger State.

Scope of the Study

This study was delimited to ways for improving the financial management practices of Small Scale Enterprises for increased profitability in Niger state, Nigeria. Specifically, the study focused on how to improve the financial planning, financial control, financial records keeping, project financing, financial investment decisions and financial reporting practices of Small Scale Enterprises for increased profitability. University accounting lecturers, polytechnic accounting lecturers as well as professional accountants in Niger State, Nigeria were surveyed to accomplish the objectives of the study.

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