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Financial management practices employed by small and medium enterprises (SMES) in the Buffalo City Metropolitan Municipality, Eastern Cape

This study examined how financial management decisions are made by small and medium enterprises (SMEs) in the Buffalo City Metropolitan in Eastern Cape, South Africa. The study aimed at discovering SME awareness on financial management practices. The financial management practices address issues on capital budgeting, working capital management, capital structure, financial reporting and analysis. The study, therefore, hypothesised that SMEs were not aware of the sound financial management practices. It was also intended in this study to examine the relationship between employment of sound financial management practices and firm financial performance. Subsequently, the study hypothesised that the employment of sound financial management practices by SMEs did not significantly affect their financial performance. The results obtained in this study revealed that SMEs were aware of the sound financial management practices that could be employed to yield high financial performance. However, the results also revealed that most SMEs were not employing qualified personnel and this in turn had an effect on the effectiveness of the financial management practices that the SMEs utilised. The findings also indicated that the employment of sound financial management practices did significantly and positively affect the financial performance of SMEs. The study recommended that SMEs could increase their chances of financial survival if they employ sound financial management practices. The study also gave recommendations to the South African Government to provide effective facilities and services to SMEs and help sustain them because they are important in the economy. Lastly, the study recommended financial institutions to relax their credit granting policies so that SMEs could access funds.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:ufh/vital:11325
Date January 2013
CreatorsMarembo, Mathew
PublisherUniversity of Fort Hare, Faculty of Management & Commerce
Source SetsSouth African National ETD Portal
LanguageEnglish
Detected LanguageEnglish
TypeThesis, Masters, M Com (Business Management)
Format193 leaves, pdf
RightsUniversity of Fort Hare

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