SOURCE:

Faculty: Education
Department: Technology Education

CONTRIBUTORS:

Onyesom, M.
Okolocha, C. C.

ABSTRACT:

The study was conducted to assess the application of working capital management practices by small and medium enterprises (SMEs) for improved performance in Delta State, Nigeria. Four research questions guided the study while eight null hypotheses were tested at 0.05 level of significance. The study adopted the survey research design and was carried out in Delta State of Nigeria. The population of the study consisted of 1128 managers of SMEs in Delta State as obtained from the Delta State office of Small and Medium Enterprises Development Agency of Nigeria. A sample of 291was drawn from the population using proportionate stratified random sampling technique. Questionnaire was the instrument used for data collection and it was validated by three experts. The reliability of the questionnaire was established using Cronbach alpha and it yielded an overall coefficient index of 0.80. The questionnaire was administered by the researcher with the help of nine assistants and data collected thereof were analyzed using summated scores to answer the research questions and Analysis of Variance (ANOVA) to test the null hypotheses. The findings of the study revealed that cash management practices were barely applied while inventory management practices were highly applied by SMEs in Delta State of Nigeria. The study also found that trade debt management practices and trade credit management practices were moderately applied by SMEs in Delta State. Furthermore, the study showed that there was a significant difference in the mean scores of respondents on the extent of cash management practices applied by SMEs as a result of their educational attainment as well as years of work experience in favour those with MSc/PhD and those with above 10 years of work experience. The results of the study also indicated that there was no significant difference in the mean scores of respondents on the extent of application of inventory, trade debt and trade credit management practices by SMEs in Delta State either as a result of their educational attainment or years of work experience. Based on these findings, it was concluded that SMEs in Delta State of Nigeria were not sufficiently applying cash management practices, trade debt management practices and trade credit management practices, and this is likely the reason for their poor financial performance in the State. It was recommended among others that agencies and associations of small and medium enterprises such as the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), National Directorate of Employment (NDE), the Nigerian Association of Small and Medium Enterprises (NASME) and the Ministries of Commerce and Industries both at federal and state levels should direct their trainings, seminars and workshops for SMEs in Delta State on the application of working capital management practices especially cash management practices to improve their performance.