Working capital management and performance of small medium scale enterprises (SMEs) in Kwara state of Nigeria

This study evaluated the impact of working capital management on the performance of small and medium scale enterprises (SMEs) in Kwara State of Nigeria. The study adopted the use of primary data obtained from administrating of questionnaires to owners and management staff of SMEs in Kwara state. Using descriptive statistics, a structural equation model and ordered logit regression to analyze the data, the study found that cash management practices significantly impact SMEs’ performance in Kwara state at 1% significant level. Similarly, account receivables practices significantly impact SMEs’ performance in Kwara state at 5% significant level. It also showed that inventory management practices significantly determine SMEs’ performance at 5% significant level. Lastly, account payable practices significantly determine SMEs’ performance in Kwara state at 5% significant level. Conclusively, working capital management significantly influences SMEs’ performance in Kwara state. Therefore, it is recommended that SMEs should give attentive concern to reducing the days for accounts receivable as well as inventories to a reasonable limit in order to generate sufficient profitability for SMEs’ owners.