MJAMR

Financial Management And Its Impact On The Growth And Development Of Small Scale Businesses. A Case Study Adjumani Town In Adjumani District.

Yawa Edith, Babirye Shamirah


Abstract

This study examined the influence of financial management practices on the growth and development of small-scale businesses in Adjumani Town, Uganda. Adjumani Town is the main commercial hub in Adjumani District, hosting over 80% micro enterprises according to a 2019 survey. However, past needs assessments revealed financial oversight as a key challenge, with most firms lacking basic bookkeeping, cashflow projections, budgets and financial statements. The researcher first conducted interviews and focus group discussions to understand common financial management deficiencies among small businesses. Financial records of 20 purposively sampled enterprises across various sectors were then analyzed over a two-year period. Financial indicators like sales growth, profitability, liquidity and investment were compared between firms that received a six-month training program on financial planning and control versus those that did not. The findings showed that following the intervention, businesses that strengthened financial oversight registered significantly higher sales growth averaging 15-20% annually compared to 5-10% for non-participants. During the interviews 20% of the respondents indicated that they carried out recording of every transaction. Some even indicated that they had adopted use of computers in making business transactions to record every transaction for easy accountability and auditing. Their profits also improved relatively faster while liquidity and investment decisions became more prudent. Qualitative data further revealed better working capital management, reduced costs, more structured expansion planning and reduced loan default rates. This should be through monitoring money coming into and going out of the business such that are know the profitability of the businesses.

Keywords

Financial Management Growth Development and Small-Scale Businesses
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Yawa Edith & Babirye Shamirah (2024). Financial Management And Its Impact On The Growth And Development Of Small Scale Businesses. A Case Study Adjumani Town In Adjumani District. Metropolitan Journal of Academic Multidisciplinary Research, 3(7). https://journals.miu.ac.ug/pages/article.php?article_id=1407