Financial Management Practices and Performance of Small and Medium Scale Poultry Industry in Ogun State, Nigeria

Abstract

Small and Medium-Sized Enterprises (SMEs) and the Agricultural sector is a combination that constitute a recognisable driving force for the development of an economy and the contribution of this sector cannot in any way be over- looked by any developing country particularly one that is struggling to diversify from petrol-carbon revenue and generate employment. The efficiency or otherwise of applicable financial management practices combined with the peculiarity and uncertainty of the business environment can make or mar the success of such SMEs operating in the poultry industry and this is the focus of this study. The study employed survey design. The study population comprised Poultry farmers in 162 farms as registered with the Poultry Association of Nigeria-Ogun State Chapter with the total of 200 farm managers, excluding farm attendants and other non-managerial staff. The Cochran formula was used to obtain a sample size of 150. The owners/managers of these Poultry farms were selected through a multi-stage sampling technique which involves the stratified, proportionate, and simple random sampling method. The instrument validity was established through scrutiny and evaluation by the research supervisors and experts in the study area, and reliability was determined via Cronbach's alpha coefficient computed from pilot study responses. By the use of instrument codes, responses were processed into quantitative data for descriptive and empirical analysis. The analysis revealed that all proxies of financial management practices such as annual budget process, capital structure management and working capital management have a significant positive effect on profitability of poultry industry (Adjusted R2= 0.258, F-statistics = 9.407.: p= 0.000<0.05). Thus, the study concluded that financial management practices proxies, of profitability, cash solvency and economic value added, has a significant positive effect on the performance of poultry industry in Ogun State, Nigeria