Abstract:
This study was conducted on The Impact of Financial Management Practices on MSEs Growth
in case of Ambo Town, West Shoa, Zone Oromia Regional State, Ethiopia which aimed to
investigate the impact of financial management on MSES growth. The findings from this study
may benefit the business owners and government itself by reduction of poverty. The research
design was combine explanatory and descriptive type of research design. The population for this
study was MSEs found in Ambo town in different sectors (livestock, manufacturing, construction,
service providers, trade, minerals, and urban agriculture) which account about 471.from these
population about 333 sample size was calculated using Yemane formula and304 data returned and
used for data analysis. The sampling technique used for this study was purposive and random
sampling. As the source of information the primary data was used and collected through
structured questionnaire. The independent variables of the study were financial reporting and
analysis, account receivable, inventory management, potential investment, financing decision,
accounting information systems and the dependent variable is financial growth of MSEs growth.
For data was analyzed using both descriptive and inferential statistics. The descriptive and
findings of were statistically significant except is not significant. Based on the result the study
concluded that for variables there was poor financial management practice for the growth of
MSEs in ambo town which resulted from low financial reporting and analysis, account
receivable, inventory management, potential investment, financing decision, accounting
information systems in Ambo Town. Therefore, this study recommends the adoption of financial
management practice which include both the managers/owners of the MSEs and government and
other regulatory bodies to create favorable policies on the implementation of financial
management practices for the MSEs growth.
