Assessment Of Cash Management Practice And Growth Of Smes In Uyo Local Government Area
Abstract
The study examines the effect of cash management and the growth of SMES in the Uyo local government area. Uyo is one of the LGs of Akwa Ibom State. The study adopted a descriptive research design. The study was conducted in Uyo metropolis. The population of the study consisted of all the SME operators in the study area. The sampling technique was used to select 383 respondents, which constituted the sample size for the study. The main instrument of the study was a questionnaire. Face and content validation of the instrument was carried out to ensure that the instrument has the accuracy, appropriateness, completeness, and language of the study under consideration. The Cronbach Alpha technique was used to determine the level of reliability of the instrument. The reliability coefficient obtained was 0.84, which was high enough to justify the use of the instrument. The researcher subjected the data generated for this study to appropriate statistical techniques, such as descriptive statistics and t-test analysis. The test for significance was done at 0.05 alpha levels. Based on the study's data analysis, it was concluded that the SME owners lacked sufficient knowledge of cash management practises and had not kept track of their cash payments and receipts. rarely prepares the cash budget and frequently operates bank accounts in current accounts. The study recommended that the management of SMEs employ competent people who can design business plans, prepare cash flow projections, and budget cash; the management must also ensure budgetary control, an internal control system, and profitable items are in place and under strict control, and improve their credit policies. The management must avoid holding too many inventories, avoid overtrading, avoid too many investments in capital expenditure, control their spending habits on luxuries, and retain profits for further growth.
Introduction
All over the world, small and medium enterprises (SMEs) are considered the backbone of a country's economy. They play a key role in economic development and make an important contribution to employment and GDP. They are also important contributors to total employment and job creation. In Nigeria, SMEs comprise 98.5% of the total number of registered companies and 60% of formal jobs, in addition to contributing 50% of the country's GDP in 2013 (1), and they are the engine of solving the unemployment problem. Cash is used to pay business obligations. Cash management is more important than any other current asset, and the main goal is to maintain adequate control over the cash position in order to keep the firm liquid and use the excess cash profitably.