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

0
395
TABLE OF CONTENTS

TITLE PAGE i
APPROVAL PAGE ii
CERTIFICATION iii
DEDICATION iv
ACKNOWLEDGEMENTS v
TABLE OF CONTENTS vi
LIST OF TABLES ix
LIST OF FIGURES xi
ABSTRACT xii

CHAPTER ONE: INTRODUCTION
Background of the Study 1
Statement of the Problem 14
Purpose of the Study 16
Significance of the Study 16
Research Questions 18
Hypotheses 18
Scope of the Study 20

CHAPTER TWO: REVIEW OF RELATED LITERATURE
Conceptual Framework 21
• Small Scale Enterprises 21
• Profitability of Small Scale Enterprises 25
• Financial Management Practices of Small Scale Enterprises 26
• Financial Planning Practices 30
• Financial Control Procedures 34
• Financial Record Keeping Practices 41
• Project Financing Practices 45
• Financial Investment Practices 54
• Financial Reporting Practices 59

Theoretical Framework 67
• Agency Theory 67
• Pecking Order Theory 69
• Separation Theorem 70

Related Empirical Studies 70
Summary of Literature Reviewed 75

CHAPTER THREE: METHODOLOGY
Design of the Study 77
Area of the Study 77
Population for the Study 78
Sample and Sampling Technique 79
Instrument for Data Collection 79
Validation of the Instrument 80
Reliability of the Instrument 81
Method of Data Collection 81
Method of Data Analysis 82

CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
Research Question One 83
Hypothesis One 85
Research Question Two 87
Hypothesis Two 89
Research Question Three 91
Hypothesis Three 93
Research Question Four 96
Hypothesis Four 97
Research Question Five 99
Hypothesis Five 100
Research Question Six 102
Hypothesis Six 103
Findings 104
Discussion of Findings 108

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Re-statement of the Problem 117
Summary of Procedures Used 119
Summary of Findings 120
Conclusion 121
Implications of Findings 121
Recommendations 122
Limitations of the Study 123
Suggestions for Further Research 123
References 124

Appendices
A: Population/Sample Distribution of Accounting Lecturers and
Professional Accountants 132
B: Letter to Respondents 133
C: Questionnaire 134
D: Letter to Validators 138
E: Summary of Suggestions made by Validators and Corrections
Effected 139
F: SPSS Output on Crunbach Alpha Reliability Coefficient of the
Instrument 140
G: Result of the Analysis 143


LIST OF TABLES
Table Pages
1: Mean Ratings of Respondents on Ways of Improving Financial Planning
Practices of Small Scale Enterprises for Increased Profitability. 83

2: ANOVA Analysis of Mean Ratings of the Respondents on the Ways
of Improving Financial Planning Practices of Small Scale
Enterprises for Increased Profitability. 85

3: Mean Ratings of Respondents on Ways of Improving Financial Control Procedures of Small Scale Enterprises for Increased Profitability. 87

4: ANOVA Analysis of Mean Ratings of the Respondents on the Ways of
Improving Financial Control Procedures of Small Scale Enterprises
for Increased Profitability. 89

5: Mean Ratings of Respondents on Ways of Improving Financial Records
Keeping Practices of Small Scale Enterprises for Increased Profitability. 91

6a: ANOVA Analysis of Mean Ratings of the Respondents on the
Ways of Improving Financial Records Keeping Practices of Small Scale
Enterprises for Increased Profitability. 93

6b: Scheffe’s Test of Mean Ratings of the Respondents on Ways of
Improving Financial Record Keeping Practices of Small Scale
Enterprises for Increased Profitability. 94

7: Mean Ratings of Respondents on Ways of Improving Project Financing
Practices of Small Scale Enterprises for Increased Profitability. 96

8:ANOVA Analysis of Mean Ratings of the Respondents on the Ways of
Improving Project Financing Practices of Small Scale
Enterprises for Increased Profitability. 97

9: Mean Ratings of Respondents on Ways of Improving Financial Investment Decisions Practices of Small Scale Enterprises for Increased Profitability. 99

10a: ANOVA Analysis of Mean Ratings of the Respondent on Ways
of Improving Financial Investment Decisions Practices
of Small Scale Enterprises for Increased Profitability. 100

10b: Scheffe’s test of Mean Ratings of the Respondents on Ways of Improving Financial Investment Decisions Practices of Small Scale Enterprises
for Increased Profitability. 101

11: Mean Ratings of Respondents on Ways of Improving Financial Reporting Practices of Small Scale Enterprises for Increased Profitability. 102

12: ANOVA Analysis of Mean Ratings of the Respondents on Ways of
Improving Financial Reporting Practices of Small Scale Enterprises
for Increased Profitability. 103


LIST OF FIGURES
Figure 1: Schema of the Conceptual Framework 66

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.


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 3rd 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

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