Financial Management Practices of Small and Medium-Sized Enterprises (SMEs)

Abstract: Worldwide, small and medium enterprises (SMEs) are recognised as backbone of a country's economy.  They play a key role in economic development and make an important contribution to employment and GDP, and are important contributors to total employment and job creation. Small, and Medium Enterprises (SMEs) have enormous potential to support the economy. However, the high potential of SMEs has yet to be developed optimally. One of the problems experienced by SMEs is financial management. The aim of this study is to underscore the financial management practices of SMEs. Purposive sampling technique was employed to collect data from 150 SMEs using questionnaires consisting of measuring each variable on five-point likert’s scale. The study employed descriptive research design. Accordingly, for data analysis, the researcher used standard tools of descriptive statistics. The result of the findings revealed that financial management practices of SMEs are moderate with an aggregate mean score of 2.88. Accordingly, the implementation of financial management still needs to improve. Recommended actions target reliable policies to enhance financial management practices of SMEs.