The Impact of Financial Management Practices on Growth of Small and Medium Enterprise in MOGADISHU

Abstract

Small and Medium enterprises (SMEs) make important contributions to economic and social development of the
country. The aim of this study was to determine the extent of financial management practices employed by the
SME’s and their effect on growth. This study was conducted quantitatively through descriptive research design; the
data was collected from sample size of 120 of some SMEs operate in Mogadishu. Used questionnaire as data
collection tool, the data analysis was done by using the statistical package SPSS version16, the data analyzed and
presented by calculation, determining frequency, percentages, mean and standard deviation. Therefore the
researchers found result revealed that extent of financial management is low among small and medium enterprises
and also, that the financial management is significantly influence on the on growth of small and medium enterprises
in Mogadishu Somalia. Furthermore the findings revealed that the cash management, accounts receivable and
inventory management are low among SME. Also that most of the selected SME don not make financial plan to
their business, at the end that most of the selected SME don not have formal accounting information system to their
business.