ABSTRACT

The work is on effect of financial literacy on the profitability of small scale enterprises in Calabar Municipality of Cross Rivers state. The main objective of this study is to clearly promote financial literacy as a tool in improving the profitability of small scale enterprises in Calabar Municipality of Cross Rivers State. The major problem associated with this study is the lack of financial literacy by small scale enterprises which is an evidence of their inability to keep proper accounting records and this has resulted into a situation where small scale enterprises operating in the state cannot capture adequately the business profit. The study adopted a survey design with a sample size of 150 respondents after stratified. The research adopted stratified random sampling technique because the study involves heterogeneous population. Carefully structured questionnaires were administered by the research to collect quantitative data. Two statistical models were used in testing the hypotheses. The one-way analysis of variance (A nova) was used in testing the first hypothesis, the second hypotheses was tested by correlated t-test. The study revealed that the level of adoption of financial literacy by small scale enterprises in Calabar Municipality is low it also revealed that utilization of accounting records by small scale enterprises significantly influences its profitability. The study therefore recommends among others that the ministry responsible for small scale enterprises in the state should initiate accounting training programs for entrepreneurs running small businesses and also they should come up with some SME-specific accounting guidelines and provides template forms for capturing 4 accounting information by small scale enterprises.