Micro-enterprises’ Financial Management in Western Upper Nile State South Sudan

Gatkuoth Kun BBA (Accounting & Finance) Department of Business Administration Faculty of Arts and Social Sciences Bus – 072 -04

Dar

Academic Research Project submitted in partial fulfillment of the Bachelor’s Degree in Business Administration Kenya Methodist University Nairobi, Kenya April 2007

Table of contents
TABLE OF CONTENTS...........................................................................................................................................................................II TABLE OF FIGURES..............................................................................................................................................................................III WESTERN UPPER NILE STATE MAP................................................................................................................................................IV DECLARATION.........................................................................................................................................................................................V DEDICATION...........................................................................................................................................................................................VI ACKNOWLEDGEMENTS.....................................................................................................................................................................VI LIST OF ACRONYMS...........................................................................................................................................................................VII GLOSSARY OF KEY TERMS............................................................................................................................................................VIII EXECUTIVE SUMMARY........................................................................................................................................................................X CHAPTER ONE: THE INTRODUCTION ........................................................................................................................................13

1.1WESTERN UPPER NILE’S SITUATION.................................................................................................................................................13 1.2THE BACKGROUND OF THE STUDY....................................................................................................................................................17 1.3OBJECTIVES OF THE STUDY ...........................................................................................................................................................20 CHAPTER TWO: THE DESIGN, METHODOLOGY AND ANALYSIS..........................................................................................21 2.1METHODOLOGY AND SCOPE OF THE STUDY........................................................................................................................................21 2.2THE STUDY SAMPLE.....................................................................................................................................................................22 2.3ORGANIZATION OF THE STUDY.........................................................................................................................................................23 2.4DATA ANALYSIS...........................................................................................................................................................................25 ....................................................................................................................................................................................................................25 CHAPTER THREE: LITERATURE REVIEW....................................................................................................................................25 3.1INTRODUCTION.............................................................................................................................................................................25 3.2THEORETICAL LITERATURE REVIEW..................................................................................................................................................26 3.3EMPIRICAL LITERATURE REVIEW......................................................................................................................................................27 3.4SUMMARY OF THE LITERATURE........................................................................................................................................................28 CHAPTER FOUR: THE STUDY FINDINGS.......................................................................................................................................28 4.1THE FACTORS AFFECTING MICRO-ENTERPRISES IN WESTERN UPPER NILE.................................................................................................29 4.1.1INTRODUCTION..........................................................................................................................................................................29 4.1.2AN UNFORGIVING LEGAL AND REGULATORY ENVIRONMENT ..............................................................................................................30 4.1.3LACK OF APPROPRIATE FINANCIAL SERVICES...................................................................................................................................32 4.1.4LACK OF MANAGEMENT SKILL FOR MICRO-ENTERPRISES IN WESTERN UPPER NILE STATE.......................................................................34 4.1.5WEAK MARKET INFORMATION, COMMUNICATIONS AND INSTITUTIONAL LINKAGES....................................................................................38 4.2THE FINANCIAL MANAGEMENT FOR MICRO-ENTERPRISES IN WESTERN UPPER NILE...................................................................................39 4.2.1INTRODUCTION..........................................................................................................................................................................39 4.2.2FINANCIAL MANAGEMENT FOR THE SUPPORTED MICRO-ENTERPRISES....................................................................................................42 4.2.3FINANCIAL MANAGEMENT FOR THE INDEPENDENT MICRO-ENTERPRISES.................................................................................................45 4.2.4MULTIPLE ACCOUNTING SYSTEMS.................................................................................................................................................47 CHAPTER FIVE: CONCLUSIONS AND RECOMMENDATIONS..................................................................................................50

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5.1CONCLUSIONS.............................................................................................................................................................................50 5.2RECOMMENDATIONS......................................................................................................................................................................51 APPENDIX.................................................................................................................................................................................................53 APPENDIX 1: THE QUESTIONNAIRES FOR THE MICRO ENTREPRENEURS .........................................................................................................53 APPENDIX 2: THE ANALYSIS OF THE STUDY QUESTIONNAIRES.....................................................................................................................56 APPENDIX 3: SELF-ASSESSMENT AND DEFINITION WHETHER TO PURSUE GROWTH..............................................................................................59 APPENDIX 4: LESSONS LEARNED FROM THE STUDY...................................................................................................................................61 APPENDIX 5: STUDY TIME TABLE FROM OCTOBER 2006 – APRIL 2007.....................................................................................................62 REFERENCES..........................................................................................................................................................................................63 BIBLIOGRAPHY.....................................................................................................................................................................................64

Table of Figures

FIGURE 1: THE EFFECTIVENESS OF MICRO-ENTERPRISE’S FINANCIAL MANAGEMENT IN THE FAST.................32 FIGURE 2: THE EFFECTIVENESS OF FINANCIAL MANAGEMENT OF MICRO-ENTERPRISES......................................34 FIGURE 3: THE MICRO-ENTERPRISE’S INADEQUATE KNOWLEDGE AND SKILLS IN FINANCIAL MANAGEMENT .....................................................................................................................................................................................................................36 FIGURE 4: THE EFFECTIVENESS OF FINANCIAL MANAGEMENT FOR MICRO-ENTERPRISE’S MEASUREMENT 37 FIGURE 5: NYAPILIENY GATLOY MACHAR'S GROUNDNUT PRODUCTION PROJECT..................................................41 FIGURE 6: THE MICRO-ENTERPRISE’S BOOK KEEPING.........................................................................................................44 FIGURE 7: NYALUAK'S CASE STUDY OF AN ONION GARDEN................................................................................................46

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Western Upper Nile State Map

Ruweng County

Rubkona County

Mayom County

Bentiu
Guit County

Koch County

Leer County Mayiandit County

Panyijiar County

iv

Declaration

This Research Project is my original work and it is never a duplicate Research from any other University or Institution.

Project Title: Name:

Micro-enterprises’ Financial Management in Western Upper Nile State, South Sudan Gatkuoth Kun Dar

Signature: Gatkuoth Kun Dar Authority:

Date: 20th / April / 2007

This Research Project has been submitted in partial fulfillment of the Bachelor's Degree in Business Administration with the approval of the University Research Supervisor.

Signature: --------------------------

Date: / April / 2007

Dr. B. Omboi Project Research Supervisor, Kenya Methodist University

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Dedication

This study is dedicated to my late brother 2nd Lt. James Mead Kun Dar who perished following the heavy fighting in South Sudan as brave man as well as other SPLA/M Officers, and any ones who lost their lives for our decade’s liberation struggles of South Sudan, may the Almighty God rest their souls in everlasting peace. This study is as well dedicated to my beloved Mother Mrs. Nyanjang Gatwiech Turuok, whose cares and loves would never be fail to remember through out my life as well as my brother Mr. Chigai Kun Dar. It is moreover dedicated to Mrs. Nyatot Koang Deang and Mrs. Nyanyanyanya Kuany Gatpan who the mothers to my dearly loved Sons namely: Buomkuoth, Goar and Leek Gatkuoth K. Dar and my dearly loved Daughters namely: Nyakuoth, Nyajaame and Nyamaale Gatkuoth K. Dar and my nephew Laat Nyakaal Kun Dar for their loves and wonderful encouragements, tolerance and support throughout this study.

Acknowledgements vi

The Researcher is grateful to the VSF-Suisse Team in Western Upper Nile State for their support in the completion of the field work for this study. My appreciations and words of acknowledgements are extended to the following individuals, NGOs, Institutions for their esteemed and sincere support rendered to the successful carrying out of the research in Western Upper Nile State and subsequent data compilation, analysis and quality report writing. A lot of thanks and words of acknowledgements go to Dr. Helen Laqua, VSF-Suisse South Sudan Programme Manager for her endless encouragements to study Accounting and Finance as well as to all individuals, NGOs, CBOs, Micro-entrepreneurs that in one way or the other contributed for the successful research completion. Extraordinary thanks go to Dr. B. Omboi, Kenya Methodist University Lecturer and my Research Advisor for this study for his guidance and close supervision as well as his continuous reinforcement. Sincere and special thanks goes to the entire study assistant team that carried out the study in most honest and humble manner despite the distances and difficulties. I am tenderly wishing and dearly appreciate the entire efforts exerted by Ms. A. Mbuthia who devoted her time in guiding and updating the proposals of this study and the technical pieces of inputs made by her. The above advisors provided considerable assistance in the collection of data and analysis of issues pertaining to Micro-enterprises’ Financial Management in Western Upper Nile, South Sudan Special thanks go to Professor. B. Makuyu, Chairman, Department of Business Administration, Kenya Methodist University for his continuous advices, counseling and guidance through out my studies. Furthermore, the study assistants for Mayom, Rubkona, Leer, Guit, Mayiandit, Koch, Ruweng, Panyijiar and Alor Counties are acknowledged for arranging field visits including the Focused Group Discussion and market face-to-face interviews with Micro-entrepreneurs. Finally, the consultant wishes to thank community members who afforded time to participate in this study and all the Kenya Methodist University Lecturers and Students consulted.

LIST OF ACRONYMS

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BEG CBO CNPC GNPOC GoS GOSS IDPs LDC NGO OAU OLS RASS SPLM/A SRRC UNICEF/OLS VSF VSF-Suisse WUN

Bahr el Ghazal Community-based Organization China National Petroleum Corporation Greater Nile Petroleum Operating Consortium Government of Sudan Government of South Sudan Internal displaced persons Less Developing Country Non-Governmental Organization Organization of African Unity Operation Lifeline Sudan Relief Association for Southern Sudan Sudanese People’s Liberation Movement/Army Sudan Relief and Rehabilitation Commission United Nations Children’s Fund, Operation Lifeline Sudan Doctors without Frontiers Veterinaries sans Frontières, Switzerland Western Upper Nile (also known as Unity State)

Glossary of key terms

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Account: Accounting period: Accruals: Asset: Audit: Balance Sheet: others. Bank Book: Bank reconciliation:

A record of monetary transactions, either written into a book designed for the purpose or entered onto a computer file. A specified period for recording and reporting financial activity for a given time; usually one year. Outstanding expenses for an accounting period which have not yet been paid or invoiced. It is an opposite of prepayments. Any possession or claim on others which is of value to the organization. See also Fixed Assets and Current Assets. The annual check on the accounts by an independent person. A summary of the financial position of an organization at a particular date, showing the assets owned by the organization and the liabilities or debts owed to A register which records all transactions passing through a bank account. It also known as Cash Book or a Cash Analysis Book. The process of agreeing the entries and balance in the Bank Book to the bank statement entries and balance at a particular date. It acts as a check on the completeness and accuracy of the Bank Book entries.

Budget: Capital expenditure: Capital fund: property. Cash flow statement: Creditor: Current assets: Current liabilities: Debtor:

An amount of money that an organization plans to raise and spend for a set purpose over a given period of time. Expenditure on equipment, property and other fixed assets which will be used to support activities over more than one accounting period. Accumulated funds and reserves held in the form of equipment and The difference between cash received and cash spent in a period. Anyone the business owes money to. Cash and other short-term assets in the process of being turned back into cash – e.g. debtors. They can, in theory, be converted into cash within one year. Short-term sources of ‘finance’ (e.g. from suppliers, bank overdraft) awaiting payment in the next 12 months. Any person or other party who owes money to the business. ix

Depreciation: Direct cost: or project. Double entry: another. Financial accounting: Fixed assets: are Impress: original level. owned

A proportion of the original cost of a fixed asset which is internally charged as an expense to the business in the Loss & Profit Account. A cost which can be specifically allocated to an activity, department The method of recording financial transactions whereby every item is entered as a debit Recording, classifying statements for those Theses by a value for more than A type (Dr) in one account and a corresponding credit (Cr) in and sorting historical financial data, resulting in financial external to the business. are Items (such as equipment, vehicles or buildings) that business which retain a significant part of their monetary one year. Therefore it is also known as tangible assets. of cash float, set at an agreed level, which is topped up

by the exact amount spent since it was last reimbursed, to bring it back to its It is an opposite of accruals. Journal entry: error. Liabilities: Liquidity ratio: Liquidity: Amounts owed by the business to others, including grants received in advance, loans, accruals and outstanding invoices. A measure of liquidity obtained by dividing debtors, cash and short-term investments by current liabilities. The level of cash and assets readily convertible to cash compared to the demands on the available cash. An entry in the books of account which covers a non-monetary transaction – e.g. for recording a donation in kind or an adjustment for correcting a posting

Executive summary x

Micro-enterprises’ financial management currently constitute a key development intervention in many poor countries. Yet, the success achieved particularly in countries who implemented such business development services a couple of decades ago and despites such efforts in those countries, there are many constraints limiting micro-enterprises’ financial management both the supply and demand in devastated Country like South Sudan and Western Upper Nile State in particular. The study finding of micro-enterprises financial management, reveals that good intentions for development of micro-enterprises’ financial management are having difficulties due to poorly designed regulations and policies, organizational behaviors, lack of marketing information and financial supports, lack of managerial skills as well as weak capacity of micro-enterprises which was contributed by high rates of illiteracy among micro-entrepreneurs. Where poverty alleviation constitutes the main development agenda, micro-enterprises’ financial regulations and policies tend to have an in-built rationing mechanism, targeting primarily the poorest and the disadvantaged, thus often missing others who might also have the demand for it. While more efforts are still needed to rectify the restrictive effects of some regulations and policies on pricing and competition, in a situation where there is no strict supervision and monitoring of the effective implementation of the well-intended business, there are microentrepreneurs, working without any hard budget constraints and mixing businesses with other family luxuries, thus multitudes out the operations of more sustainable micro-enterprises’ financial management. For those who are intent on implementing the rules of strict financial management, their methodologies are largely duplications of those implemented elsewhere, primarily under Arabs, with little capacity to customize it to local realities. No less challenge also remains on the demand side. For the majority of micro-entrepreneurs, the communication system in rural areas, particularly the road network, bars them from accessing the services. Support for the micro-enterprise sector has received increasing attention as a strategy for poverty alleviation, largely because it accounts for between 20 and 70 percent of employment in many developing countries. Microenterprises often constitute important components of complex and dynamic household survival strategies through which, family members contribute to the subsistence of the household in different ways. They are often operated at the household level, frequently by only one person and in most countries; the majority of micro-entrepreneurs are women. The specific characteristics of the individual enterprise are related to household size and composition, division of labor by gender and age, and patterns of remunerative and non-remunerative household labor. Where the access is granted, clients low skill achievement in business development dictates their business’ absorptive capacity to xi

remain weak. Many are risk averse, or don’t like (for cultural reasons) to venture into non-traditional activities, while others have a very low income perspective and simply don’t have the demand for such income-improving services. Such problems manifest themselves more profoundly on women, whose very access and benefit from the service is further limited because of problems emanating from a male-dominated patriarchal societal system prevailing in Western Upper Nile as well as whole South Sudan. This study has scope for primary research or in-depth examination or assessment of some particular issue concerning the financial management of micro-enterprises in Western Upper Nile. Therefore, the analysis is more of an overview based on the obtained information on micro-entrepreneurs in Western Upper Nile, but with an added analytical dimension on the theory of financial management. Given the time constraints and the specified scope of work, this endeavour is intended to be neither exhaustive nor comprehensive, but a modest step in the direction of pinpointing the importance and need for examining the opportunities and constraints facing microentrepreneurs through an entrepreneurship perspective. The study combined documentation which means reading written materials for relevant information and drawing conclusion hence this methods could not helps much since there has been no existing documents relating to this study in Western upper Nile. Observations beside watching and listening social interactions, noting what happens, observing physical environments as well as mostly interviewing some of the respondents using structured questionnaire for seeking information from individuals or groups was successful launched for the purpose of this study. The study was proposed to conduct an interview of 500 out of 1,000 micro-enterprises. It includes a total of 100 and 50 which is 20% and 10% of micro-enterprises targeted in Rubkona and Guit Counties; 50 which is 10% of micro-enterprises targeted in Ruweng County; 75 and 25 which is 15% and 5% of micro-enterprises targeted in Mayom and Alor Counties; and 100, 50, 25 and 25 which is 20%, 10%, 5% and 5% of micro-enterprises targeted in Leer, Koch, Mayiandit and Panyijiar Counties respectively.

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Chapter One: The Introduction

1.1

Western Upper Nile’s Situation

Western Upper Nile’s civil conflict has deep roots in its fast history. We Southerners reacted against our marginalization by armed resistance starting in mid 1950s known as Anyanya I. Then after a decade of peace following the Addis Ababa agreement in 1972, the fighting has continued without interruption since 1983-2004 which is known as Anyanya II when SPLM/A took harms against the Khartoum government. The last civil conflicts that came to an end on 9th January 2005 between SPLA/M now termed as government of South Sudan. The war-torn zone of Western Upper Nile remains seriously prone in the earliest 1997-2002 and the people being subjected to recurring food shortages which tampered with businesses. The area was seriously at risk since 1997 when Inter-clan fighting occurred and the massive displacement in 2002 when Khartoum government displaced civilians out of their original places. As a result, an estimated 150,000 people have been displaced from their places. At the present, Western Upper Nile retained highest number of internal displaced persons (IDPs) and returnees hence those are involves in small businesses. The oil development poses the main threats to local people living around the oilfields in Western Upper Nile consequently; it could boost businesses if business ethics are applied by the companies. Chevron discovered oil at Unity oilfield (Kailuoy) and Heglig oilfield (Nokpout), north of Bentiu the capital of Western Upper Nile State in 1978. By 1983 Chevron abandoned it’s concession in Western Upper Nile, South Sudan, since they were in an area where fighting was taking place between the Khartoum government and the SPLA/M. The second oil operating company is the Canadian Arakis Energy, which was, acquired a portion of Chevron’s former concession at Unity oilfields and Heglig oilfields north of Bentiu in 1993. It began developing the Unity and Heglig oilfields within its concession meanwhile, the production on smallscale started in 1996 (about 2000 barrels/day). This oil was processed and consumed internally by the ArabMuslims of the north and their sponsored militias. In 2001, Swedish Lundin oil, which has been operating in joint venture with Australian OVM, Malaysian Petrona’s and Sudapet announced that, oil had been struck at Tharjath (Rier) exploration well in Western Upper Nile south of Bentiu. Another importance Oil Company is China National Petroleum Corporation (CNPC). The mentioned companies work under the Great Nile Petroleum 13

Operating Consortium (GNPOC). The Arakis ceased its operation in 1998 and Talisman Energy took-over the operation and this was followed by the construction of 1,640km pipeline from Unity Heglig oilfields in Western Upper Nile to Port Sudan in 1998. Western Upper Nile lies on the Western part of Upper Nile at the bank of the river Nile and it is mostly characterized by Bahr el Ghazal river (Naam river) which extended from the river Nile and navigating along the Rubkona County, lowering downward Mayom County and up to Tonj and Gogrial Counties in Warrab State. Western Upper Nile consists of nine (9) Counties namely:- Mayom County; Rubkona County; Ruweng County; Guit County; Alor County; Koch County; Leer County; Mayiantit County and Panyjiar County. All the eight Counties are accessible by roads from Bentiu town except Panyijiar County which is not accessible by road. Western Upper Nile shared border with Southern and Western Kordufan to the North; Twice County to the northwest; Gogrial County to the West; Tonj County to the south-west; Rumbek, Yirol and Bor Counties to the south, Ayod County to the South-east; Fangak County to the east and Shilluk kingdom to the north-east. As peace prevails, the clearance of waterways on the White Nile and Naam River was the first successful project implemented by the government in conjunction with oil processing companies’ in order to opens routes for businesses between Malakal in Upper Nile State, Jonglei and Juba. Even though the clearance of the swampy reeds that line the banks of the Bahr el Ghazal River (Naam River) is a good step toward business linkages, a large ship with a crane towers would not be able to pass over the small El Salaam Bridge, which connects Rubkona town with Bentiu, the capital of Western Upper Nile State in south Sudan. The swampy reeds was cleared by a dredger, had just finished clearing the overgrown 97km waterway that links Bentiu via White Nile with Malakal and Juba in the south and Khartoum and Kosti in the north. The clearance of the swampy reeds took more than hundred days to complete since weeds, water lilies and tall grass had formed a very heavy vegetation punch that was totally closing the waterway. It is the first time the waterway is open in decades and represents the most visible peace dividend for a town that suffered greatly during the 21-year confrontations. Since, the signing of the CPA on 9th January 2005, life has rapidly changed in Western Upper Nile State despite the heavy present of Khartoum government troops in the strategic oilfields. A lot of traders from the North Sudan are now in Western Upper Nile. It is very expensive to transport large quantities of bulky goods by air or roads from East Africa, such as building materials, fuel, sugar, and sorghum but this has given chances to our Arab fellows. The barges, which are always patiently inched up the river behind the dredger, do arrive in 14

Western Upper Nile State’s capital of Bentiu as well. The barges are generally heavily loaded with building materials, cements and other goods for the reconstruction of the town, which lies in the middle of South Sudan’s main oilfields. During the conflicts there were many pro-government militias’ clashes, but due to the CPA people are now settle together and solved their common problems Western Upper Nile State contains some of the largest oil fields in South Sudan. During the civil war and following the discovery of oil by Chevron in the 1978, some of the deadly fighting took place especially in Bentiu, since 1999, when oil extraction began. The Khartoum government was determined to maintain its hold on the region, supplying its own troops and arming and financing local militia to clear the area for oil exploration and extraction as well as cleared off the SPLA/M. The Khartoum government troops were using helicopter gun ships and air bombardments in order to chase the people out of their villages almost in entire parts of South Sudan which are having some minerals as discussed in the next coming paragraphs. Supply of goods and services - Since the signing of the comprehensive peace agreement, many business people in East Africa have focused their attention to invest and have Southern Sudan as a market for their goods. Others are focused on providing services such as education, medical, communication and postal services, transportation (road, water and air transport) and tourism. Southern Sudan is an emerging market and has great opportunities in the supply and distribution of various types of goods used in reconstruction in all sectors, manufacturing and processing of agricultural produce, farm implements and transport equipments such as assembling of bicycles and hand crafts. Great potential exists in micro-enterprises sector and in the supply of products that make the sector grow. Finance and business development services - On business finance sector, opportunities exist in setting up commercial banks, development banks, housing mortgage banks, micro-finance institutions through community groups, production peer groups being promoted by NGOs and other development partners as well as establishment of Credit and Savings Organizations. These micro finance institutions will in the long run stimulate savings for future local investment. Export trade - Southern Sudan potential exports include oil, natural gas, gold, diamonds, platinum, zinc, titanium, iron ore, copper, chromium ore, gold, tungsten, mica, silver, cement, ruby, red opal, sapphires, grey and yellow maraval, uranium, animals products (cattle, sheep, goats, red meat, hide and skins), fish and marine life, cotton, horticultural products, cut flowers, fish, gum Arabic, timber products (teak and mahogany), honey and bees 15

products, shear tree vanilla/butter, lulu seed, sesame, edible oils, groundnuts, coffee, tea, finger millet, sorghum, Soya beans, sugar, mangoes, apples and other agricultural products., hydropower Import trade - Import commodities include education materials (Text books, writing materials, pens), cars

trucks, passenger vehicle, automotive components, bicycles, motorcycles, building materials (cement, construction equipments, steel, house interior fixtures, tools, iron sheets) agricultural fertilizers, human and veterinary medicines, various petroleum products and plastic items, and textiles and knitwear and whole range of household items such as cooking fat, salt, soaps, grains etc. With the reconstruction work, most of the materials will be imported from neighboring countries. Although some of the products will have to be processed locally. In medical sector, hospitals and health centers will need to be supplied with drugs, equipments and other related products, all which will come from or through Kenya. Opportunities in the supply of and equipping many housing projects with a variety of products also exist. Schools provisions remain a major requirement. Manufacturing and Processing of Locally Available Raw Materials - The construction industry will need a lot of products, such as building stones, bricks, timber and sand some of which are locally available. Processing and making of these products will have to be done locally using imported machinery and expertise. Sawmilling and quarry industries are potentially possible. In agricultural sector, perishable products such as vegetables and fruits will need to be canned for export. Meat and meat products such as beef, milk, butter, hides and skins will be locally processed for export markets. Potential for food and beverages industry exists in Southern Sudan. The long and severer war has taken its toll on the Sudanese manpower. There has been erosion and emigration of qualified and skilled personnel as an impact and consequences of the war. Southern Sudan does not only lack facilities to train personnel, but is also in critical shortage of essential experts such as doctors, teachers, Lawyers engineers, and other expertise to manage both the private and public sectors. On the ground, the NGOs, local community development organizations and church organizations are involved in market development programmes through training and entrepreneurship development and management training programmes such as modern methods of production, marketing of farm produce and storage thereby promoting home gown expertise. These emerging lots of entrepreneurs, together with the entrepreneurial culture being created by NGOs and other civil society groups along with the expected more experienced returnees will be encouraged to enter into joint venture activities or partner with foreign investors to run small scale enterprises. 16

The socio-economy of South Sudan has over the past decades been marked by time-consuming conflicts and with off-putting growth and on the other hand, most of it is resources are yet to be utilized for the economic well being of the people of South Sudan. The decade’s armed conflicts and lack of participatory governance have remained the main blockages that have prevented full exploitation of it is resources. With peace agreement signed on 9th January 2005 and the strengthening of the civil authority in the states, and the interest shown by the international community to assist in the economic development of the South Sudan, these recourses can be exploited for the benefit of the citizens of the South. The ventures are high for south Sudan to take the opportunity and commence the process of economic development immediately if handle with care and eliminates the corruptions in the government Institutions; otherwise, the application of corruptions the economic development would still lag behind and unlimited. South Sudan is endowed with enormous rich natural resource base, and yet the region virtually has remained in abject poverty. This is basically due to the many years of economic exclusion and isolation by the successive regimes with bias in the north and the effect of the hostilities, which has ranged for over twenty years. Even before the conflicts, there had been little comprehensive economic investment in South Sudan and this was further provoked by the impact and consequences of devastating conflicts that had just ended with the signed comprehensive peace accord. 1.2

The background of the study

This study explained many of the financial management activities available for micro-entrepreneurs. The effectiveness, including the cost-effectiveness and impact, of these studies in addressing the needs of microentrepreneurs in Western Upper Nile is an area worthy of further research. Where business development-specific organizations and projects exist in Western Upper Nile, their formal and informal roles, as well as their financial management ability and member activities will require further credentials. It should be helpful to profile a crosssection of micro-entrepreneurs, including members of business specific groups, partly to provide greater visibility for micro-entrepreneurship, hence partly to provide role models for potential micro-entrepreneurs - particularly for young entrepreneurs entering the labor market for the first time.

17

As the problems of running a micro-enterprise can be very different from those encountered at the start-up stage, it would also be worthwhile to undertake studies into the factors which encourage or inhibit the financial management of micro-enterprises in Western Upper Nile as outlined by this study. Such studies should prove to be most useful for Government, donor organizations, NG0s, business support organizations, and indeed for the micro-entrepreneurs themselves. It has never been easy in the past in Western Upper Nile for micro-enterprises to take off but, as a results land, livestock, roads and other services often destroyed during armed conflicts or natural disasters. Today as comprehensive peace agreement signed on 9th January 2005 between the Khartoum government and the SPLA/M prevails many people need to know what kind of action they can take to rebuild their devastated businesses, but recovering from these crises is easier when people share the loads, helps and creates awareness through different findings and means similar to this study. Without openness and financial planning, a family or an entrepreneur will struggle even more when they meet a financial crisis because managing money wisely is a challenge for any household, regardless their income level. Some common issues faced by small businesses are planning and keeping to a budget; saving for the future; planning when work is temporary and uncertain; coping with sudden expenses for family use; getting out of, and staying out of, debt. Financial management multi-practices in a formalized sense, is not a new observable fact among microentrepreneurs in Western Upper Nile. Although certain ethnic communities in the state, especially Dok of Leer County, Jagei of Koch County and Nyuong of Panyijiar County are known to have a long tradition of entrepreneurship being involved in managing their micro-enterprises, it is only within the last two years that the concept of entrepreneurship has progressively gained some acceptance in the overall prevailing majority of Leek of Rubkona County; Bul of Mayom County; Western Jikany of Guit County; Alor of Alor County and Pariang of Ruweng County within the their civilization. With the growing recognition that micro-enterprises have unique talents which could be strap up for development and for creating employment opportunities for others who are not suited to an entrepreneurial career. In this view, developing entrepreneurs has become an important part of national development planning and strategies in almost all over South Sudan. Micro-enterprise development is the central point for the economic development of the Country. South Sudan and Western Upper Nile in particular have become acutely aware of the economic significance of the entrepreneur’s productive activities and the nature of their contribution to income generation. Therefore, financial stability of micro-entrepreneurs in Western Upper Nile are vital and productive contributors to the national economy but their 18

access to knowledge, skills, resources, opportunities and power still remain rather low hence need to be handle with care. Over the past two years micro-entrepreneur’s participation in economic activities has also moved beyond hand to mouth concept into the local market economy. In Western Upper Nile micro-entrepreneurs are moving into small business and self employment ventures thereby creating many formal and informal opportunities for work hence are lacking financial management skills to sustain the business. The cruel circle of financial backwardness and poverty can be eliminated by transforming the emerging economy into a dynamic one through active entrepreneurship knowledge. In these circumstances, one major way to achieve the goal of micro-enterprise development could be through establishment of small-scale enterprises. For this to happen, it is recognised that entrepreneurship development can be the key to raising the prospects for increasing the share of small-scale and cottage industries in the national income as (Tuladhar. J, 1996) explained. It is against these surroundings of micro-enterprise development and micro-entrepreneur’s role and participation in the national economy that one must critically view the emerging needs of and scope for entrepreneurial development in Western Upper Nile. The history of entrepreneurship development programmes in Western Upper Nile is quite recent. While the Khartoum government has been interested in the development of small-scale and micro-enterprises since the late 1980s, for the better off of Arab traders, issues and questions relating to the promotion of Southern Sudanese entrepreneurs have only been raised more recently. The number of Southern Sudanese who come under the category of entrepreneurs in a formal sense is still negligible in the eye of Arabs. The representation is somewhat better in the informal sector with a higher percentage of women applying for loans in locally formed groups. Therefore, some of the fundamental questions that were explored within this study in connection with financial management of micro-enterprises are: 1. Why do micro-enterprises in Western Upper Nile State have inadequate knowledge and skills in financial management? 2. How can the effectiveness of financial management for micro-enterprises in Western Upper Nile State be measured? 3. Has financial management for micro-enterprises in Western Upper Nile State been effective in the fast? 19

4. How can the effectiveness of financial management for micro-enterprises in Western Upper Nile State be explained? 5. Can the explanations be generalized or focused for certain reasons? There is no wide-ranging body of work in the micro-entrepreneurs’ financial management research field in Western Upper Nile and the topic of micro-entrepreneurs’ financial management virtually remains untouched, with the exception of a few feasibility studies carried out by NGOs within the last five years which have merely scratched the surface. The need for more substantial research, especially an exploration into the microentrepreneurs’ financial management perspectives of this issue cannot be over emphasized, especially in view of the fact that a fair degree of awareness has already been raised, particularly among the urban influential, about entrepreneurial ventures, challenges and scope in micro-enterprises.

1.3

Objectives of the Study

The overall objective of the study is to examine the assumptions of how micro-entrepreneurs are managing the financial aspects of their small businesses by generating small businesses management tools necessary for the effectiveness and efficient financial management of micro-enterprises in Western Upper Nile State, South Sudan. The study is academic dilemma which has accommodated academic knowledge into practice by generating guidelines of how to management the financial aspects of micro-enterprises by micro-entrepreneurs who have or intent to management the financial aspects of their micro-enterprises. The micro-entrepreneurs ’financial management had been studied within three broad categories, as demarcated by the specific objectives below: 1. To identify micro-enterprises’ various sources of inadequate knowledge and skills in financial management in Western Upper Nile State, South Sudan; 2. To establish suitable effectiveness and efficient criteria of financial management in Western Upper Nile State, South Sudan; 3. To describe the extent to which the effectiveness criteria for financial management of micro-enterprises’ have been met in Western Upper Nile State, South Sudan; 20

4. To determine the factors associate with the effectiveness criteria for financial management of microenterprises’ being met and estimate whether some of those factors are more influential than others among micro-enterprises’ in Western Upper Nile State, South Sudan; 5. To develop an exploratory theory that associates certain factors with the effectiveness of financial management of micro-enterprises’ in Western Upper Nile State, South Sudan.

Chapter Two: the Design, Methodology and Analysis

2.1

Methodology and Scope of the study

This study is based entirely on primary sources as well as some secondary sources. The basic methodology has been to review the relevant literature on micro-enterprises’ financial management, accounting system with the representatives of the concerned micro-enterprises for additional and new or updated information; explore any 21

other data sources available, and analyze the financial management factors on the basis of information thus generated. This study has scope for primary research or in-depth examination or assessment of some particular issue concerning the financial management of micro-enterprises in Western Upper Nile. Therefore, the analysis is more of an overview based on the obtained information on micro-entrepreneurs in Western Upper Nile, but with an added analytical dimension on the theory of financial management. Given the time constraints and the specified scope of work, this endeavour is intended to be neither exhaustive nor comprehensive, but a modest step in the direction of pinpointing the importance and need for examining the opportunities and constraints facing microentrepreneurs through an entrepreneurship perspective. The study combined documentation which means reading written materials for relevant information and drawing conclusion hence this methods could not helps much since there has been no existing documents relating to this study in Western upper Nile. Observations beside watching and listening social interactions, noting what happens, observing physical environments as well as mostly interviewing some of the respondents using structured questionnaire for seeking information from individuals or groups was successful launched for the purpose of this study. The survey was made by conducting face-to-face interviews with micro-entrepreneurs using a pre-designed questionnaire. The questionnaire (as shown in Appendix 1) was designed as a series of 30 questions. They are concerned about: general information; micro-enterprise start-up; technology aspects; marketing aspects; financial aspects; legal aspects; services received and desired; business associations; and how to improve business prospects and entrepreneurship. The questionnaire is intended to be predominantly qualitative in nature. Although some of the answers can be tabulated in numerical form, the resulting statistics are not used as the main factor in reaching the conclusions of the survey since it is not designed to be a “scientific” survey. As such, the survey summary is drawn from the qualitative information and impressions gathered from the interviews, as well as the analysis of the tabulated data. 2.2 The study Sample

The micro-enterprise in this study is defined as having less than 2 persons, working in a normal situation. The micro-enterprises included are in the manufacturing, trade and services sectors. The study was proposed to conduct an interview of 500 out of 1,000 micro-enterprises. It includes a total of 100 and 50 which is 20% and 22

10% of micro-enterprises targeted in Rubkona and Guit Counties; 50 which is 10% of micro-enterprises targeted in Ruweng County; 75 and 25 which is 15% and 5% of micro-enterprises targeted in Mayom and Alor Counties; and 100, 50, 25 and 25 which is 20%, 10%, 5% and 5% of micro-enterprises targeted in Leer, Koch, Mayiandit and Panyijiar Counties respectively (see Appendix 2 ). In Bentiu, it was found that the government agencies, under the welfare schemes, have supported unemployed people to set up micro-enterprises. The support was mainly financial, to enable the target group to start up a business to earn income. In particular, the statement government gives a grant of 10,500,000 Sudanese Pound (US$ 5,000) per person to be working as a group in micro-enterprises. In addition it was also found that some Non-Government Organizations (NGO), like Germany Agro-Action, VSF-Suiess and Ludin Oil processing company etc, has given financial and other support to people in Western Upper Nile to start up micro-enterprises in their own communities. At the time of the study, several micro-enterprises have been set up with this form of support. Many of these have just started, while a few have been inactive. From those that were active, 390 of 500 microenterprises in 9 Counties were randomly chosen for interview of this study which comprises of 78% and 110 which is 22% could not be completed due to the time constraints. Thus the interviews with “micro-enterprises” in Western Upper Nile were carried out with randomly chosen micro-enterprises found on the streets of the 9 Counties in Western Upper Nile. This study was done in collaboration with the Western Upper Nile State Office of Ministry of Finance and Economic Planning by choosing randomly from the list of 1,000 micro-enterprises provided by the Ministry. Consequently, out of 390 a total of 200 interviews were drawn from services and 190 were drawn from trading businesses. 2.3 Organization of the Study

The study is divided into five chapters: 1. Chapter One: Introduction - on behalf of the clarity of this study was divided into sub-sections, sets the national context, introduces the subject matter of investigation,. 2. Chapter Two: the Design, Methodology and Analysis - for the purpose of this study were divided into subsections, and specify the methodology, scope and analysis of this study.

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3. Chapter Three: Literature review - includes a brief main purpose of literature reviews, which had a great helps toward identification of the theories and ideas that explored such data that subsequently relate to the study. 4. Chapter Four: The Study Findings - was divided into sub-sections, examines the overall findings towards the factors affecting micro-enterprises and the financial management traits of micro-enterprises vis-à-vis entrepreneurial functions. 5. Chapter Five: Conclusion and Recommendation - finally, presents a summary of findings, major observations and a set of recommendations on how to promote and strengthen the potential of microentrepreneurs in Western Upper Nile as well as South Sudan in general.

The methods and procedures of data collection for this study include: Collections of data using secondary data – this data incorporate both quantitative and qualitative data, which were used in both descriptive and explanatory studies. This was mainly secondary data such as books, journals, magazines and news papers; Collection of primary data using questionnaire – In general terms, this include structured interviews and telephone questionnaires as well as those in which the questions answered without being present. The questionnaires was therefore used for exploratory; survey; descriptive and explanatory studies which are the backbone for this research project. The study was able to use both self-administered questionnaires, i.e. delivery and collection questionnaires and interviewer-administered questionnaires, i.e. telephone questionnaires and structured interview. Collection of primary data using semi-structured and in-depth interviews – the nature of the questions and the ensuing discussion means that data have been recorded by note - taking, or perhaps tape – recording the conversations while in-depth interview – gave the person an opportunity to talk freely about events, behavior and beliefs in relation to this study. Collection of primary data through observation – this involves: the researcher observation – which have been suitable for qualitative data and emphasis on discovering the meanings that people attached to their actions and structured observation – which is a quantitative and is more concerned with the frequency of those actions

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because the study questions and objectives were concerned with what people do, an obvious way in which to discover this was to observed the way they do it 2.4 Data Analysis

Analyzing data quantitatively – the quantitative data for this study was ensured that the data collected were analyzed by computer as straightforward as possible. In particular, attention was observes in the scheme for each variable and the lay out of the data matrix and graphical charts. Bearing the research questions and objectives in mind, the study was selected the most appropriate diagrams and tables after considering the suitability of all possible techniques. Analyzing data qualitatively – by undertaking an initial semi-structured or in-depth interview related to the research project, there was a professional set of categories from the research questions and objectives, conceptual framework, research themes and initial propositions. Produced a description of these categories and evaluated these categories to form a rational set in relation to the aim of the research.

Chapter Three: Literature review

3.1

Introduction

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Managing money by micro-entrepreneurs is never easy. South Sudanese families on low or uncertain incomes often struggle to cope with payments such as school fees or health care. Although, businesses multifunction for the last twenty-two years in South Sudan, we often lives in societies where assets like cattle, sheep and goats, poultry, radios and TVs among other goods encourage us to spend money. If small businesses or families do not manage such money worries, there can be all kinds of serious consequences. K. Tondeur (2003) quoted it that, "Jesus talked about money more than anything else! In the bible there are about 500 verses concerning faith and about 500 on prayers. However, there are 2,350 verses about money and possessions. As Christians, we need to take managing money seriously by understanding biblical teaching on money and possessions". As on the above statement, Money mismanagement could be a source of conflicts in many households. Lack of openness over money management could lead to a breakdown of trust and collapse of business. Financial pressures could lead to all kinds of tensions at home since there are many small businesses opportunities nowadays as the South Sudan experiencing peace. Continuous stress over money management can cause various health problems. The small businesses owners in Western Upper Nile State, South Sudan had eventually experiences unused potentials of limited resources; high rate of joblessness; Substantial failure of small businesses in profit maximization and quitting out from un profitable business operations; Poor quality of life; rural entrepreneurs staying backward and remain dependent; Social unrest; wealth inequality and frustration. Most of the abovementioned effects are largely causes by inadequate knowledge and skills in financial management. Poor accesses to financial information lack of career guidance and counseling in business environment. 3.2 Theoretical Literature Review

The main purpose of this theoretical literature was to reviews the literature, which generated some helps for identification of the theories and ideas that have been tested using data and explored such data in order to develop theories subsequently related to the study. Thornhill, A., Lewis, P. and Saunders, M.'s (2003: 43) words: "knowledge doesn't exist in a vacuum, and your work only has value in relation to other people hence, your work and your findings will be significant only to the extent that they're the same as or different from, other people's work and findings". Therefore, the study had established what researchers were published in the study area of

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financial management and there are no studies that might currently be in progress. Currently there is no existing literature in Western Upper Nile in the area of "Financial Management for Micro-enterprises". Eugene, F., B and Louis, C., G (1985) identified that; "Financial Management has undergone extensive evolution from 1900 to the present, which has resulted in Financial Manager playing an increasingly important role in the business Organization". In financial management theory, it is the responsibility of financial management to allocate fund to current and fixed assets, to obtain the first mix of financing alternatives and to develop an appropriate dividends, policy within the context of the objective of the micro-enterprise. Stanley, B., Block and Geoffrey, A., Hirt (1984) said, "the daily activities of financial management include credit management, inventory control, receipt and disbursement of funds while, the less routine functions encompasses the sale of stocks, friendship and the establishment of a capital budgeting and dividend plan". In this modern business environment if one were to establish the most important good for a financial management a suggestion might be that, it is to aims and earns the highest possible profit the business, because the factor associated with many small businesses that should encourage the implementation of a careful cash management is the growth elements. As John, D., Martin (1991) acknowledged, "the small firm use relatively large amount of debt in the financing of the business, which may be the consequences of entrepreneurs' greater susceptibility to assume risk". It is actually true that most small businesses do not take risk seriously hence, the surprise arise in the last minutes. Therefore, the three financial statements generally serve to give a picture of the financial status of a firm necessary to avoid the kicking of the ball into the goal. A good financial management is therefore vitally important to the economic health of a micro-enterprise, nation and the World at large. For it is importance, financial management should be thoroughly understood, but this is easy said than done as Robert C, Higgines (1984) explained, " regardless of financial area of expertise or business size, managers who posses the skills of financial analysis are able to diagnoses their firms' ills, prescribe useful remedies and anticipates the financial consequences of their action." In the case of micro-enterprise, the entrepreneur who failed to succeed is like a ball player who cannot keep score and the entrepreneur who does not fully understand "accounting and finance" works under unnecessary handicap. 3.3 Empirical Literature Review

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The main purpose for this practical literature review is to practically familiar with the beliefs and the attitudes which are fixed in the culture. Applied clear knowledge which resulted as a study of study materials and lecture notes about the study concept; understood it and therefore aware for the reasons of the chosen or choice or selection of this study field; the chosen field was my inborn knowledge and probably field of my consciences. There is no existing study in Financial Management for Micro-enterprises in Western Upper Nile State, hence, the study have been chosen due to the technical know – how about the study field and continuously acquired knowledge by listening, hearing, seeing and drafting financial records in the study field for the production of a practical financial reports necessary for micro-enterprises. 3.4 Summary of the Literature

Empirical literature review was therefore included the key academic experience within the chosen area. This has shown how the study area relates to the previous publishers in financial Management though there were none in Western Upper Nile. This study accesses the strengths, weaknesses, opportunities and threats for financial Management for Microenterprises and eliminated bias and considered thus in the arguments. Justification was done by referencing the relevant documents.

Chapter Four: The Study Findings 28

4.1

The factors affecting Micro-enterprises in Western Upper Nile

4.1.1 Introduction

The terrifying constraints exist in Western Upper Nile to micro-enterprise formation and expansions are the following constraints: The first constraint is an unfavorable policy, legal and regulatory environment for enterprise. Micro-entrepreneurs seeking to expand into the formal sector are reluctant to graduate to microenterprise level, incurring as they will experience the high cash and transaction costs of compliance with business registration, tax and labour law. In most part of Africa only a tiny proportion of micro-enterprises graduate from the informal to the formal sector, leaving the rest unable to borrow from commercial banks or obtain other business services - hence restrict economic growth and job creation. The Western Upper Nile State government must learn that inappropriate laws and regulations seriously inhibit development at the institutional level. Micro-enterprises are always constrained by legal requirements on issues such as minimum capitalization, loan collateral, deposit mobilisation, interest rate as well as inappropriate route to their target markets and services. The second constraint is a lack of appropriate financial services. Poor families need simple, low-cost savings and insurance instruments to reduce their economic vulnerability. Micro-entrepreneurs also need appropriate credit and leasing services to support long-term business growth. Despite the recent comprehensive peace agreement and oil exploration in the Western Upper Nile State, there are no micro-finance institutions which extending savings and credit which are sustainable to the poor. The third constraint is the shortage of management skill and business development services. The private sector needs access to effective training in management systems; production and distribution of technologies; marketing; technology; and market research. Shortcomings in management and skills shortages can cripple business, especially small and medium-scale enterprises, as they emerge from family control into broader ownership structures. Low productivity, poor resource use, inexperienced management, and low levels of basic or computer literacy and vocational skills in the workforce all impede business development in any specified field. Finally, micro-enterprises are constrained by insufficient market knowledge, poor communications and 29

institutional linkages. Currently, we need at least a good number of micro-enterprises to enjoy the benefits of adequate physical infrastructure such as roads and transport, or modern communications facilities such as telephones, the internet, trade publications or libraries. Micro-enterprises that do possess such facilities are invisible and insufficiently in Western Upper Nile State. Consequently, there are market failures as essential business support from financial intermediaries, trade linkages, technology and knowledge does exist. Therefore, we all need Large or medium-scale businesses and small enterprises to develop institutional linkages and partnerships with each other to bridge this gap. This will provide new customers and sources of labour and inputs for larger enterprise, and new market opportunities for micro-entrepreneurs within the State. The micro-enterprises in Western Upper Nile State urge the state government to intervene in improving the legal and regulatory enabling environment for enterprise at all levels; developing financial markets, institutions and instruments to support enterprise growth particularly for micro-enterprise and addressing constraints in management, technologies and market knowledge for micro-enterprise in order to create a conducive environment for micro-enterprises from the following constraints. 4.1.2 An Unforgiving Legal and Regulatory Environment

As stated above, most micro-enterprises operate with little or no knowledge of the laws governing their business practices. When conflicts arise or when required to do so by law, these enterprises especially microenterprises - are usually dictated to by government officials who may not fully understand or appreciate their businesses. This has created difficulties and problems which could have been avoided if the micro-enterprises had a greater knowledge and understanding of the laws and regulations.The micro-enterprises could do with to operate well in South Sudan if there is an undisturbed environment that encourages fair competitions and market competences. This demands a skeleton of sound and stable macro-economic policy; competent legal and regulatory institutions; functioning commercial, contract and bankruptcy law and justice; effective property rights, employment and consumer standards; and sensible regulation on health and safety, business registration and trade licensing. The government policy in South Sudan was in the past biased towards big influences by Khartoum government which was only backing Arabs traders since they had a big businesses, or sponsorship of large, 30

state-owned firms. The Arab enterprises were favoured in the allocation of scarce resources such as foreign exchange and credit. Over the last decade, however, South Sudanese politicians and traders have recognised the importance of liberalising the economy, breaking down political monopolies and investment, and providing a more enabling environment for the entire South Sudanese people. On the other hand, an inheritance of heavy corruption, unfavorable government policy, non-operational law and extreme regulation still persevere in the infant government of Western Upper Nile hence such factors are heavily constrain micro-enterprise development. Although the government of South Sudan’s national microenterprises’ policy is on the pipeline to kick off, the law enforcement on the ground will still be hold-up well due to the long absent of legal environment. Otherwise, the government of South Sudan is still the only choices for the South Sudanese compare to the government in Khartoum where micro-enterprises’ Legislation is often applied unevenly across black Africans, poorly co-coordinated government departments within Southern Sudan. The bureaucratic barriers facing entrepreneurs generally in Sudan under the Islamic and dictatorship government during registering a business, obtaining a trading licenses, or complying with health and safety or labour law at local level could now be untie by the government of South Sudan toward meeting the needs and demands of her citizens. That was why there has been no effective financial management in the fast as designated by the underneath.

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100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Rubkona Mayom Yes No Leer No response Ruweng
,,,,,,,,lp///

Figure 1: The effectiveness of micro-enterprise’s financial management in the fast In Khartoum for example, it frequently takes a several months to register a new business from a South Sudanese, after which time there are still several more government forms to be filed in Arabic, on employment and tax issues alone. Not as good as still, South Sudanese micro-entrepreneurs commonly face absolute discrimination from rent-seeking public officials if one wants to venture into a business in Khartoum because if the South Sudanese managed themselves and became entrepreneurs, no body could be responsible for low income jobs in Khartoum and those ventured into such businesses were normally harass and obtain under duress, or dismantle their goods on the side of the road or marketplace stalls. The hostile environment in South Sudan created by a prolong conflicts by Arabs North has been damaging the South Sudan’s long-term goal toward minimizing negative consequences for micro-enterprises. To develop a more favorable business environment, the Western Upper Nile State government could eventually raise public awareness of the economic importance of micro-enterprise; engage public and private sectors in dialogue to create better, pro-poor enterprise policy; and simplify and improve business registration, licensing and other legal requirements.

4.1.3 Lack of Appropriate Financial Services 32

As described above, most micro-enterprises do not have any proper internal book-keeping system to provide them with information vital to the effective management. This is because of the lack of or inadequate skills of the entrepreneurs in financial management and accounting, and the enterprises cannot afford to hire a fulltime accountant. It was found that this problem was as serious in the micro-enterprises as in the small enterprises. However, judging from the consequences arising from this problem, it is more urgent to address this issue in small enterprises than in micro-enterprises.In general, lack of appropriate financial services in Western Upper Nile State remain the most widely wondering area for the poor families. Since all business requires capital, micro-entrepreneurs need appropriate credit services from micro-finance institutions to support long-term micro-enterprise growth hence; this is a nightmare for micro-entrepreneurs in Western Upper Nile State. The stated (figure: 3) explained the failure of effective financial management in the fast.

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Rubkona Mayom Yes No Leer No response Ruweng

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Figure 2: The effectiveness of financial management of Micro-enterprises Despite the recent success of many micro-enterprises in extending services to the poor, these microenterprises still in the hand of Arabs origin and only a tiny proportion of micro-enterprises are owned by the locals. Most businesses survive with no institutional finance, depending instead on family savings or informal moneylender credit that is usually either too scarce or too costly to permit business growth. It is therefore very important to expand the micro-finance institution sector to reach vastly greater numbers, at the same time building its retail capacity through the introduction of management training, innovative financial services, and progressing institutions towards full commercial viability. Despite increasing harmony that subsidies undermine the sustainability of financial services and divert benefits from the poor, many NGOs and donors continue to provide heavy relief for those in needs. This approach usually distorts private capital markets, as the potential profitability of micro-finance is “disguised” by cheap or free donor capital or items, and it always goes largely unnoticed by private financial institutions. Few of the East Africa’s strongest micro-finance institutions even now are linked with mainstream commercial banks - even though these institutions represent the only lenders large enough to serve the vast financial services market for the poor. The Nile Commercial Bank and Kenya Commercial Bank are now in process of deepening of capital markets to reach micro-enterprises will help the entrepreneurs to diversify their services, mitigate financial risk to their depositors in the event of cyclical economic downturns or political upheaval, and reach more poor clients. To address the lack of financial services, I urge the Western Upper Nile State government to strengthen retail capacity of entrepreneurs as well as micro-finance institutions. This will focus on further development of financially sustainable savings, credit, leasing and insurance services that reach more clients, and advance the institutions providing these services towards full commercial viability. The Western Upper Nile State government in cooperation with potential Investors would seek to deepen penetration by mainstreaming capital markets to micro-finance institutions and small and medium-scale enterprises and also encourage the use by donors of non grant-based support mechanisms, including guarantees and equity instruments. 4.1.4 Lack of Management Skill for Micro-enterprises in Western Upper Nile State 34

This problem was found more in the small enterprises surveys, as their operations rely on more and better skilled workers than is the case for the micro-enterprises. With the very limited skills development services that are available, especially in the Counties, most micro-enterprises had to hire unskilled workers and then trained them on the job. This has adversely affected their productivity and has been an added burden for these enterprises. Skill shortages can cripple economic growth in poor counties, whether at the level of senior policy makers or micro-entrepreneurs. Management development needs constant attention through practical training methodologies. This is particularly true for micro- enterprises, as they emerge from family control into broader public ownership structures. Successful transition may be blocked by a variety of factors such as: low productivity; poor resource use; and weak management systems. Above all, low levels of literacy and educational achievement in the workforce obstruct the hiring of competent staff. The educational system needs to develop direct vocational skills, relevant to the needs of informal sector entrepreneurs as well as larger, more formalized businesses. Raising the level of computer literacy is also a major challenge to enable micro-enterprises to take commercial advantage of the internet revolution. For economic growth of the State, the micro-entrepreneurs needs to access appropriate training in management; production and distribution technologies; marketing; technology; and academic and applied research. Regardless of high demand of services, lack of management skills is an unsolved challenge in Western Upper Nile State as indicated below.

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100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Rubkona Mayom Yes No None Leer Ruweng

Figure 3: The Micro-enterprise’s inadequate knowledge and skills in financial management To make stronger management and business development services, Western Upper Nile State government and private sector could improve the capacity and competitiveness of service providers to respond to the needs of enterprise. This requires a mix of interventions to strengthen governance and leadership; financial management; production and distribution methods and technologies; and research. To create a better trained workforce, new approaches would have to be adopted in order to install entrepreneurs as trainers of other entrepreneurs as well as the government exchanging its enterprise development knowledge and experience with its international and national partners. The lack of or limited access to credit financing - This problem was found to affect most of the micro-enterprises in the study. For most supported and independent micro-enterprises which do not have substantial assets to be used for collateral, access to credit financing in Western Upper Nile is not available to them at all. In the case only few micro-enterprises have access to credit financing but, the amount of funding is very much limited to the value of assets available as collateral. This has limited and sometimes denied these micro-enterprises the opportunity to grow or expand to their 36

real level of potential. The lack of access to wider markets - As entrepreneurs generally have to perform all of the management functions in the enterprise, they usually do not have time and/or resources to reach out or to develop access to the markets further away from their immediate locations. And with the absence of business development services (BDS) in Western Upper Nile, they generally do not have knowledge or information on other markets. This has limited the ability of the micro-entrepreneurs to market their products to larger groups of customers and expand their business. This problem was found to be more serious general problems in the micro-enterprises included in the Study as presented at this point.

100% 80% 60% 40% 20% 0% Rubkona Mayom Leer Ruweng

5 4 3 2 1 0 Yes None No

Figure 4: The effectiveness of financial management for micro-enterprise’s measurement The lack of capability for business is planning - Most entrepreneurs have not been trained in business management. Most of them had started and operated their enterprise without proper business planning. As a result, many enterprises had encountered problems such as inadequate funding, inadequate market, inappropriate equipment and technology, inadequate access to skills and skilled workers, etc. These factors have combined to cause the micro-entrepreneurs many difficulties and contribute to their poor return on investment. Had the business been properly planned, many of these problems could have been avoided by 37

these entrepreneurs (see how to write a business plan Appendix 4). 4.1.5 Weak Market Information, Communications and Institutional Linkages

At present and in the absence of BDS, the micro-enterprises have virtually no sources of information on other markets or opportunities that are outside of the immediate surroundings of their enterprises. Most of the time the micro-enterprises lack the knowledge’s or ideas on how to develop their products or services in order to capture wider markets. This has made market expansion too heavily dependent upon speculation, sometimes too costly for the enterprises, and thus limited the new market opportunities to grow or to expand their businesses.Many micro-enterprises are geographically remote from markets, and are impeded by poor physical infrastructure such as roads or transport facilities. This raises business costs and reduces the competitiveness of their products and services. The equipment and technology employed by the microenterprises surveyed are typically based upon the limited exposure and past experiences of the entrepreneurs themselves, as well as on information provided by suppliers, friends and relatives. These micro-enterprises have hardly any agency that they can contact to acquire such relevant information. This has made their choice of equipment and technology, and the chances to upgrade for greater efficiency, very limited. Furthermore, the information received is frequently dependent on accepting a proposal from one particular supplier or other. This problem seems to be more serious in all the Counties. To overcome market failure, businesses need to develop multiple institutional partnerships with other firms; producer groups such as chambers of commerce or trade associations; centres of research; clients and suppliers, all of whom can provide useful market intelligence and new opportunity in Western Upper Nile State. Micro-enterprises are positioned at an essential point in the enterprise market between well-resourced medium and large scale enterprises that enjoy these facilities, and the disempowered micro-enterprise sector. For the private sector to compete effectively, larger enterprise needs to integrate vertically with smaller enterprise. There must be a deepening of markets, trade linkages, and the flow of technology and information to fill the “missing middle” in the institutional architecture separating international markets at the top, and small enterprise at the bottom. Providing access to market expand activity and it mutually profitable to larger and small enterprise alike, this can be expected to create equitable economic growth that benefits all levels of society. For these reasons, private sector development as a whole, and not only small-scale enterprise 38

development, is at the heart of the government of South Sudan’s mission to eliminate poverty. Lastly, to improve market knowledge, communication and institutional linkages, the government could stimulate trading relationships and other forms of business partnership between locals and international investors except Arab investors who can create unfavorable atmosphere. These will involve small and medium-scale enterprises, micro-finance institutions, business development service providers, producer groups, research centers, clients and suppliers. The government focus could be on integrating larger enterprise vertically with smaller enterprise, deepening market activity, trade, and knowledge from big business down to small enterprise. 4.2 The Financial Management for Micro-enterprises in Western Upper Nile

4.2.1 Introduction

Financial Management - is the process of how micro-enterprises are managing their financial resources, including accounting and financial reporting, budgeting, collecting accounts receivable, risk management, and insurance for a business. The financial management system for micro-enterprises includes both how you are financing it as well as how you manage the money in the business. In setting up a financial management system as entrepreneur your first decision is whether you will manage your financial records yourself or whether you will have someone else do it for you. There are a number of alternative ways you can handle this. You can manage everything yourself; hire an employee who manages it for you; keep your records inhouse, but have an accountant prepare specialized reporting such as tax returns; or have an external bookkeeping service that manages financial transactions and an accountant that handles formal reporting functions. Some accounting firms also handle bookkeeping functions. Software packages are also available for handling bookkeeping and accounting. Bookkeeping- refers to the daily operation of an accounting system, recording routine transactions within the appropriate accounts. An accounting system defines the process of identifying, measuring, recording, and communicating financial information about the business. So, in a sense, the bookkeeping function is a subset of the accounting system. A bookkeeper compiles the information that goes into the system. An accountant takes the data and analyzes it in ways that give you useful information about your business. They can advise 39

you on the systems needed for your particular business and prepare accurate reports certified by their credentials. While software packages are readily available to meet almost any accounting need, having an accountant at least review your records can lend credibility to your business, especially when dealing with lending institutions and government agencies. Setting up an accounting system, collecting bills, paying employees, suppliers, and taxes correctly and on time are all part of running a micro-enterprise. And, unless accounting is your small business, it is often the bane of the small business owner. Setting up a system that does what you need with the minimum of maintenance can make running a small business not only more pleasant, but it can save you from problems down the road. The basis for every accounting system is a good bookkeeping system. What is the difference between that and an accounting system? Think of accounting as the big picture of how your business runs. Income; expenses; assets; liabilities; an organized system for keeping track of how the money flows through your business and keeping track that it goes where it is supposed to go. A good bookkeeping system keeps track of the nuts and bolts - the actual transactions that take place. The bookkeeping system provides the numbers for the accounting system. Both accounting and bookkeeping can be contracted out to external firms if you are not comfortable with managing them yourself. Even if you outsource the accounting functions, however, you will need some type of Recordkeeping Systems to manage the day-to-day operations of your business - in addition to a financial plan and a budget to make certain that you have thought through where you are headed in your business finances. And, your accounting system should be producing Financial Statements. Learning to read them is an important skill to acquire. Another area that your financial management system needs to address is risk. Any good system should minimize the risks in your business. Consider implementing some of these risk management strategies in your business. Certainly, insurance needs to be considered not only for your property, office, equipment, and employees, but also for loss of critical employees. Even in businesses that have a well set up system, cash flow can be a problem. There are some tried and true methods for Managing Cash Shortages that can help prevent cash flow problems and deal with them if they come up. In the worst case you may have difficulties meeting all you debt obligations. Take a look at financial difficulties to learn more about ways to manage situations in which you have more debt than income. Therefore, read the following case history of Nyapilieny Gatloy Machar’s groundnut production project. 40

Figure 5: Nyapilieny Gatloy Machar's Groundnut Production Project
Mrs. Nyapilieny Gatloy Machar is one of the active members of the women's group in the Pilieny village, a farming community with rolling terrains located some 30 km from Leer County. Like other households in the village, her husband is engaged in the farming and wood gathering. She's 33 years old and takes care of the household work and their 4 children. Since she joined the group she has been thinking how to help her husband to generate additional income for the family. At first, upon discussion with other women members, she thought of a small scale traditional equipments workshop. But the capitalization required was 50,000 Sudanese Found and she could not afford such capital. She finally decided on a groundnut producing project. The raw materials (groundnuts) are readily available in the village since most farmers, including her husband, grow groundnuts in the village. Moreover, she learned from the traders who often visit their village looking for groundnuts, that producing groundnuts would earn her good income. She learned from them that if she sells in Leer County, she can make a gross profit of 20 sacks of 50 kgs and or even higher at 120 sacks of 50 kgs if she sells in Bentiu. Also, she has a younger sister who used to work in a groundnut producing factory in Khartoum and she was confident she could learn the techniques required in such activity. Encouraged by the potential of the project she obtained a loan from the Pilieny women's group. In addition, she had some savings of her own and she was able to start the project in June 2006. In the end of rainy season groundnut produce the best quality of nuts. Mrs. Nyapilieny decided to producing groundnuts only during this season. For the whole season she was able to sell 56 sacks of 50 kgs. In selling at Leer Town she later learned that there are different prices depending on the quality of good groundnuts. Nevertheless after investigating which among the three buying stations in Leer offered the best price, she settled into one station. She however incurred losses when she tried to sell in Bentiu. About 20 sacks of 50 kgs were not paid for at all. She personally took care of the project. Her husband and children assisted her in some of the activities of the project like gathering of sacks from the relatives for the groundnuts. They could gather 2 sacks of 50 kgs of groundnuts per day. She had minimal expenses for the project. She bought about 50% of the groundnut sacks from the village. The rest of the groundnut sacks, she obtained from their own harvest. She also had sufficient wood oil which was already good for the whole season. Some time they could even fry the groundnuts for sell and she did not buy the needed pans as she had already two before the project and these were enough for the quantity she has been producing. She was not able to keep records of the financial transactions but she is confident she was able to earn from her business. Although the income of the project is mixed with their other household income, she was sure that the whole net profit was used to invest in another project, a Traditional Chair and Beds manufacturing project. At the same time, she is planning to expand her groundnut producing project for the whole of the three seasons that is including during summer and autumn. She also plans to hire workers so that she can process more. A. 1. 2. B. 1. Question: What are the internal and external factors that affect this micro-enterprise? Illustrate this in a table. Is this a good project for Mrs Nyapilieny to become more self-reliant? If Yes why and how? Answers: Nyapilieny's Groundnut Producing Factors Affecting the Success or Failure of Business Internal Factors Strengths Raw materials grown by family Sister has skills in groundnut External Factors Opportunities Villagers grow groundnuts

Business Stage A. Planning Stage Production

Weaknesses No skills. But sister can assist

Constraints

41

production Marketing No concrete market in formations (relied on informants in formations) No anticipation of quality requirements Financial Organization B. Implementation Production Marketing Financial Own savings Husband supportive Raw materials availability Skills learned easily Lack negotiating skills No records Mixed accounts Can not determine real net income Supportive family Only 1 good Loan from Pilieny women's group capital available Groundnut factory in town

market outlet

Organization 2.

Undertaking of this micro-enterprise it strengthens Mrs. Nyapilieny's self reliance, because: a) b) c) d) e) She learns technical skills as well as business skill, e.g. negotiating, decision-making, risk taking. She has acquired the support of her family members. She raises capital by herself and increased her own income. She plans and manages the enterprise herself. Others will respect her for her achievements (break through in traditional thinking).

It is possible you may even be at a point where you want to sell the business or simply close it and liquidate assets. There are financial issues involved for these circumstances too. So, be certain that you know what steps you need to take in order to protect yourself financially in the long run. Clearly, financial management encompasses a number of crucial areas of your business. Take time to set them up right. It will make a significant difference in your stress levels and in the bottom line for your business.

4.2.2 Financial Management for the Supported Micro-enterprises

The entrepreneurs - are mainly individuals or groups of laid off workers, or some of the unemployed local population, who have their own ideas about income generation. They have approached the various agencies for financial support to establish their enterprises. They usually already have the skills needed for their business operations, acquired either from previous employment or from training. However, most of them do 42

not have experience in marketing or financial management aspects of business. In general they are aged between 30 to 50 years old, with education at the elementary, high school or vocational school level. Although no discrimination is evident in the support policies and programmes, there are significantly more women than men in this group of supported micro enterprises. This gender aspect will be dealt with in more detail later. The Enterprises - supported micro-enterprises are mainly engaged in the manufacturing sector. Start-Up - this category of entrepreneurs already have their own business ideas and operational capabilities. However, start-up is made possible only because of the financial support received from the various government agencies. No other means of funding seems to be accessible. The amount of capital needed for the start-up may vary between 20,000 and 200,000 Sudanese Found. Apart from financial difficulties, finding proper premises for business seems to be the most significant problem. Most of them end up using community facilities or their residences as business premises which in many cases can hinder or limit their business activities. Production or Production operations in supported micro-enterprises are generally relatively simple, labour-intensive and traditional technology. And with entrepreneurs mostly skilled in the production or operations, this should be the strongest characteristic of the enterprises. However, the enterprises are found to be complacent about their production operations and use of technology. They do not seem to look for better methods, improved effectiveness or enhanced efficiency. Marketing - Sales are usually made in the area nearby to the business premises with customers coming to the enterprises to make purchases. Occasionally these enterprises are called on to join trade fairs organized by government agencies to assist in their marketing. Significant sales are made in these fairs alone. Some enterprises even rely on the fairs for a good proportion of their income. Finance - As financial support from agencies is given as a lump sum at the start-up of business, many enterprises find out later that these funds are not adequate for their working capital. While other external means of financing is available, business activities have to be limited and are subject to certain disadvantages. Basic book-keeping is used for cash and inventory records only as summaries by the below figure.

43

Is Book-keeping of Accounts Used?

100% % of Respondents 80% 60% 40% 20% 0% Rubkona Mayom
Counties

5 4 3 2 1 0 Leer Ruweng No. of Respondents
Yes No response No

Figure 6: The micro-enterprise’s book keeping

Legal Environment - Legal aspects seem to be scale-neutral for these supported micro-enterprises. They appear to be neither a constraint nor helpful to the business. Besides, most entrepreneurs do not have much knowledge of the commercial law, tax law or regulations related to or governing to their business. At present, the benefits allowed by the regulations, such as tax exemptions, have very little or no effect on these enterprises. Business Development Services (BDS) - At present no formal BDS is found for supported micro-enterprises. Some advice or marketing assistance (mainly fairs or flea markets) are provided and these are normally based on the initiatives of individual officials. If possible, the enterprises would want to obtain marketing assistance. Associations - The enterprises are not members of business associations. They are not represented as members operating in the private sector of the country. They do not understand the important role of representative associations and they do not see the usefulness of such associations. Entrepreneurship - For the support programmes provided by the government, entrepreneurship is not a precondition or a criterion or qualification required in order to be able to avail of this support. Some entrepreneurs and government officials alike even see the programme as a temporary measure to solve social and economic problems, rather which support for business creation. 44

4.2.3 Financial Management for the Independent Micro-enterprises

The Entrepreneurs - The entrepreneurs in this group are individuals who have gained experiences from their former employment, are unemployed, or else have never been employed. They have adequate resources and wish to create an enterprise of their own. They are seekers of opportunities and resourceful enough to realize their entrepreneurial ambition. They can be either male or female, and aged around 28-40 years old. Their educational background may be at elementary, high school, vocational, or university level. The Enterprises -The independent micro-enterprises are operating as manufacturing, service, or trading firms. Most of them are new enterprises, between 1 to 5 years old. Start-Up - In general, the independent micro-enterprises are started up with the entrepreneurs’ own financial resources. They may get some assistance from relatives or friends, but seldom from financial institutions. The amount of capital needed for the start-up may vary between 100,000 and 500,000 Sudanese Found. Apart from financial difficulties, finding proper premises - especially for service and trading businesses - seems to be the most significant problem. Most of them operate from rented premises, rather than owning their own premises. Production or Operations - The production operations in independent micro-enterprises are generally simple, using traditional technologies. And with entrepreneurs mostly skilled in the production or operations, this should be the strongest character of the enterprises. Again the enterprises are found to be complacent in their operations and technology. They do not seem to look for better methods, effectiveness or efficiency. Only very few enterprises are found to be interested in seeking the most appropriate technology for their business. Marketing - Sales are usually made in the area nearby their business premises with customers coming to the enterprises to make purchases. Finance - Access to funding from financial institutions for independent microenterprises is limited due to the lack of assets for collateral. In many cases, the working capital is financed by suppliers. Book-keeping is carried out only for cash and inventory records. The enterprises generally use an external accountant to make official book-keeping and tax filing. Legal Environment - The legal aspects are scale-neutral for these enterprises. They appear to be neither a constraint nor helpful to the business. Besides, most entrepreneurs do not have knowledge of the commercial law, tax law or regulations related to or 45

governing to their business. At present the benefits allowed by the regulations, such as tax exemptions for professional services, etc., have very little or no effect on these enterprises. Business Development Services (BDS) - At present no formal BDS exists for these independent micro-enterprises. Some advice or information is received from friends, customers, and suppliers. Associations - The enterprises are not members of business associations. They are not represented in the private sector of the country. They do not understand the role of associations, and do not see the usefulness of associations. Entrepreneurship - Entrepreneurship is strong in this group. They had to invest their own resources in the business and overcome many obstacles in order to have an enterprise of their own. However, many entrepreneurs view their enterprises as an occupation or income generation activity, rather than a real business. Some even turn down opportunities that have been offered to them in order to avert the accompanying risks. In order to overcome these problems, proper financial and business development services and improved access to these services should be made available to the micro-enterprises. In particular, Micro-enterprises needs non-collateral credit or non-loan financing scheme, particularly for start-up and for expansion. Marketing and networking assistance, especially for markets outside of the enterprises’ immediate surrounding areas; Training on simple accounting and financial management, including budgeting; Advisory and information services on technology management, taxes, laws and regulations, market opportunities, and product development; Access to skilled workers, as well as to skills development for existing workers; Training in business concepts, business environment and business planning; Training in entrepreneurship development and opportunity identification. They generally feel complacent after the enterprises have reached a certain level of operation, and will not seek or do not feel the need for further opportunities to grow or expand, especially when any degree of risk is involved. All of them are new enterprises, only 1 or 2 years old. They are mostly very small, even smaller than typical independent micro-enterprises. Here is the case history of Nyaluak’s an Onion Garden. Figure 7: Nyaluak's Case study of an Onion Garden
Nyaluak is a micro-entrepreneur in the Rubnyagai village in Rubkona County. She has 4 children. Her husband works as a factory worker in Unity Oilfield within Rubkona County. Nyaluak cultivate 2 acres of sorghum land. For many years she has been cultivating sorghum and has not made good profits. Because of her very low profits from cultivating sorghum, she thought about planting onion. But before she made a decision, Nyaluak made a careful survey throughout Rubnyagai market of which types of vegetables are in demand and commands higher price. She went to several market places within nearby villages like Barmalual, Nhialdiu and Dhorkan and found out that Onions sells at very high prices and onions were in high demand. She went to an agricultural technician from the local government department of agriculture and asked how onion is grown. Providentially there was a workshop to be given on onion for 2 days. She attended the 2 day workshop and

46

learned how to raise onion. Since the workshop was basically conducted through demonstration and field practicum, Nyaluak learned how to plant' water, fertilize, weed and harvest onion. She also learned that on 2 acres of land, she will need 500 Sudanese found for land preparation, fertilizers, chemicals, labor and other incidental expenses. Nyaluak has only 250 Sudanese found. She went to her parents and requested for a loan of 250 Sudanese found at 2% interest per month. Then she went to the market place and secured the commitments from buyers for her cabbage produce. With a ready market for her onion, she started to grow onion in her land. She religiously followed what she had learned from the workshop at the local government department of agriculture. Nyaluak has recorded all her production expenses on onion production. Later than 3 months, she started harvesting onion and selling them to her buyers. She also recorded all her sales. Her total sales amounted to 1,250 Sudanese found. She made a profit of 750 Sudanese found. Out of the profit, she paid her loan of 250 Sudanese found to her parents including the interest. All the rest of the profit, she reinvested in onion production by renting an additional 2 acres of land. Questions: A: Is Nyaluak’s business successful? B: If so, what are the factors which contributed to her success? C: Does the undertaking contribute to more self-reliance? Answers: A: We would definitely say “Yes”, Nyaluak’s business is successful. B: The factors which contribute to her success are: 1. 2. 3. 4. 5. Marketing - Nyaluak conducted a market survey; She determined the demand and price of onion; She secured her sales through negotiations Production - Nyaluak attended workshop in production of onion; she knows the proper practices involved in onion production from land preparation to harvesting of produce; Financing - Nyaluak used her savings and secured a loan; Nyaluak reinvested all her earnings in onion so she can expand her business; Management/Organization - Nyaluak took care of all stages of production according to what she learned from her workshop (land preparation to harvesting); she kept a record of her transactions. Self-reliance - Nyaluak has the principle of self-reliance, since she showed initiative of thinking about something new by herself; Nyaluak was realistic in that the micro-enterprise she chose was small, relatively low risk and can be managed together with her other tasks; relatively simple technology and low investment; relatively short production-cycle (less than a year), so quick return of investment; contribute to cash income; Because Nyaluak succeeded, her confidence and enthusiasm has increased; Nyaluak 's management skills have improved because now she has first hand experience; she has learned a new technological skill.

4.2.4 Multiple Accounting Systems

The accounting system of a growing business must change and adapt to new needs after growth. Changes in accounting may be resisted by employees who are comfortable with the existing system. Also, when accounting systems change, it becomes more difficult to compare past trends with current results. Further, a new or improved accounting system can cost time and money to develop and implement, placing an additional strain on limited resources. Despite these negatives, a growing business usually needs additional management information from the accounting system. The purpose of most accounting systems is to provide management with 47

information, control and feedback. If your accounting system is used only for providing information to the Internal Revenue Service (IRS), it is not fulfilling its total purpose. If business growth is occurring in existing product or service lines, the current system will apply to the new growth cycle. However, because the number of transactions will increase, the accounting system should be evaluated to ensure the data are accumulated in an efficient manner. This evaluation should include whether certain types of transactions need to be re-categorized. When you begin a business, you choose the operating fiscal year, whether it is a calendar year or some other 12month period that is convenient for you. When the business begins to grow, reconsider your fiscal year. Perhaps the new activity will be seasonal, i.e., in a different season than you currently use. You should consider some type of tax year that matches the season and avoids splitting the season into two tax years. The accounting system is slightly different for a sole proprietorship, a partnership or a corporation. During a growth phase, you should perhaps consider other forms of ownership and implement the accounting system that matches that form. Managers need guidance to make decisions. If you operate with a single or a simple accounting system that produces a single income statement and balance sheet, consider developing two or three separate accounting systems, one for each area of your business, which can then be consolidated into one income statement and balance sheet. The separate systems will enable you to know what is happening. This is similar to the concept of developing profit centers for a business. If you operate a retail business, profit centers are divided into different functional areas in your store, or, if you are a manufacturer, they are based on your product lines. Accounting systems for each profit center allow you to determine the profitability of each product. If each product line or profit center category is generating a profit, then the overall business will be profitable on a consolidated accounting statement. An example is a retail hardware store generating one income statement. Management might benefit from dividing the business into functional areas such as household, sports and tools, and developing income statements for each of these areas. This information still must be consolidated into one statement, but the individual statements provide information that will help maximize profitability in each area. This system also works for branch offices, which are often established to increase business activity. Each branch office has its own operating system, and then they are pulled together into a consolidated system. Accounting systems are set up so that information flows from a large number of entries to a final income statement and balance sheet. Income statements allow trends to be tracked by listing a current month's sales and expense amounts, current month's percentages, year-to-date activity and year-to-date percentages. The current month percentage is the expense amount for the month divided by sales. For example, if sales were $100,000 48

and wages were $10,000, the percentage for wages is 10 percent ($10,000 wages divided by $100,000 sales). This system must be maintained, although categories may need to be added in a growing business. The owner of a growing business should be able to access reports that track the efficiency of the operation. If the information is compiled appropriately, it will be readily available at minimal cost. For example, on an income statement for a restaurant, the cost of sales and labor are separate items, including their dollar amounts and their percentage relative to sales. Combine these and compare them over a time period. If prepared food is purchased, the food cost per meal served will be higher but the labor cost lower. This is particularly true in a restaurant in which the labor and cost of food can be inversely related. The important factor overall may be the combined percentages of labor and material compared to sales. (However, be aware that trends are not always accurate for comparison because they may fluctuate seasonally. Compare trends from the same time frame each year. This can be done by using a table or a graph to express the comparison.) Management can determine operational efficiency by several factors not measured in dollars. Efficiency means that the business operation is maximizing output levels for a given amount of time or resources. The management information generated by the accounting system results in an accurate measure of efficiency, but there is other information that can be accumulated to measure efficiency. An example is the number of prospect phone calls made over a certain time. By accumulating, recording and tracking this information, the efficiency of the sales staff can be calculated. In a manufacturing business, this can be the number of hours it takes to perform certain tasks or the resulting data collected from a statistical process control system. Because these reports increase the fixed costs of your business, any report request should be thought through carefully to ensure that the result is of value to the user. With computerized data systems, it is very easy to produce a lot of paper that isn't meaningful or usable for management. The Growth should produce additional profit, which will result in an increasing tax obligation. Several aspects of taxes affect growth. Tax reduction often does not result in a decreased tax obligation but transfers payment of the obligations to a future time. In a real sense, total tax dollars paid over a long-term period are going to be fairly constant. The idea usually is to reduce taxes now, and then invest the money so that as taxes become due more money is available. One of the primary tasks of tax planning is contemplating profitability over the next 10 to 20 years. If projections show profits will be low in the first years and higher thereafter, consider transferring profit to the first years. Should projections indicate higher taxes or profit in the first years, arrange to pay tax now. Several factors influence this decision. One possibility is to amortize expansion costs that are unrelated to 49

capital improvements. Capital improvement can be depreciated based on a determined life span. This span usually involves physical assets that wear out, as compared to expansion costs that can have a positive effect on sales volume in the future. An example is any expenditure used to develop a channel of distribution that is going to be in existence for some time. This cost can be calculated and amortized over a minimum of five years, thus reducing expenses in the current year.

Chapter Five: Conclusions and Recommendations

5.1

Conclusions

When future growth is anticipated by business owners, the enthusiasm and challenge often draw the owner's attention away from the financial aspects of the business. Business history is full of examples of micro-enterprises that accomplished growth but were unable to sustain their new position, often because of careless attention to managing the finances that support growth. Financial management needs to correspond to the expansion activities being undertaken. Giving proper attention to managing finances will enhance growth potential and sustain levels of sales once they are obtained. Financial planning should be viewed not as an obstacle but as a means of ensuring your success (see lesson learned in this study in Appendix 4). 50

The challenge of a growing business should be carefully weighed against your personal drive to achieve what you are attempting. It often seems that the time and effort it takes to achieve goals in business increase more than what was originally projected. Part of a well-devised plan is to have options open to compensate for possible areas that do not develop as expected. To have these options identified so they can be implemented immediately can often make the difference between success and failure. To a great extent, growth potential is based on your ability to know yourself. You must either have the personal abilities to complete the growth, or you must know your limitations and have resources available to cover them. (See the self-assessment questionnaire in Appendix 3.) Also, in some instances, business owners rely too heavily on outside expertise or employees and are misguided or misunderstand their ability to assist in obtaining growth. The encouraging side of growth is that many others have undertaken and achieved growth successfully in business. There are many success stories in which people have improved their income potential and their net worth.

5.2

Recommendations

Although the main purpose of this study is to present the results of the micro-enterprises’ financial management, which serves as a form of "academic" to confirm or verify former knowledge of micro-enterprises, the information gathered from the study has been analyzed and several issues become apparent for the development of microenterprises. These issues are then used to make recommendations for micro-enterprises development in Western Upper Nile as follows: Since most micro-enterprises reported that no business development services have been made available to them, it is recommended that a Business Development Service delivery framework is developed to ensure that microenterprises are benefiting effectively from these services. As part of this effort, various agencies or organizations should be identified for the particular services that they can effectively make available to micro-enterprises, both in Nine Counties and in the state. An action plan should then be developed to ensure that these agencies and organizations are well-equipped and well capable of reaching the designated target groups, and delivering the services to the micro and small enterprises in need. Following from the results of this, the services to be provided should at least cover the following: Marketing assistance; Networking assistance; Training in simple accounting and financial management, including budgeting; Advisory and information services on technology management 51

and productivity improvement; Advisory and information services on taxes, laws and regulations; Advisory and information services on market opportunities and product development; Access to the market for skilled workers, as well as skills development services for existing workers; Training in basic business concepts, the business environment and business planning; Training in entrepreneurship development and Training in opportunity identification. As reported earlier, most micro-enterprises have problems with the present system of credit financing using guarantee. Therefore, it is recommended that a non-collateral credit or a non-loan-financing scheme is developed and made available to the micro-enterprises. The financing scheme should be based upon the merits and viability of the business proposals submitted by the micro-enterprises, and should not impose heavy burden on the microenterprises. It is also recommended that the delivery of the scheme should be through local agencies or organizations which have the potential to effectively reach out to the existing micro-enterprises and potential entrepreneurs. It is also recommended that the provision of the financial services be performed in close cooperation with the BDS provision, in order to make the micro-enterprises capable of preparing their business proposals, and to ensure that the enterprises receiving the financial services will have a high probability of being successful. As this study has been carried out with only a small sample, and is not comprehensive, it is recommended that more a comprehensive and detailed study should be conducted on specific characteristics of the micro-enterprises such as their need for and access to BDS support; the relationship between sales, asset value and number of workers of micro-enterprises; appropriate age of potential micro-enterprises to start a business; the impact of education level on business prospects; and identifying and addressing a range of gender issues affecting microenterprise development in Western Upper Nile State. Such a study should provide an accurate basis upon which various policies and support measures regarding micro-enterprises can be established. It is recommended that business associations among micro-enterprises be promoted in Western Upper Nile State, as these have been proven to be highly beneficial elsewhere. Micro-enterprises should be made more aware of the importance and usefulness of these associations, and urged to participate actively. Initially, the associations should be assisted and strengthened (through targeted Government support) in order that their functions can be effectively performed. These functions should at least cover the following: Representing the micro-enterprises in 52

dealing with the government and other parties; providing or being a vehicle for the provision of Business Development Service to the micro-enterprises; being a focal point in monitoring the development and needs of micro-enterprises. It is recommended that a further detailed study be carried out to determine the existing barriers and constraints (including physical, procedural and psychological) facing first-time women micro-enterprises in Bentiu. In addition, the study would be expected to recommend practical and tangible remedial actions which can lead to greater economic empowerment of women engaged in micro-enterprise activities.

Appendix

Appendix 1: The Questionnaires for the Micro entrepreneurs

Name: ---------------------------------------------------------------------------------------------State: ----------------------------------------------------------------------------------------------Payam: -------------------------------------------------------------------------------------------Business's Name: --------------------------------------------------------------------------------

Age: -------------------------------------------------------------------------------Sex: ---------------------------------------------------------------------------------County: ----------------------------------------------------------------------------Town: -----------------------------------------------------------------------------Village: ---------------------------------------------------------------------------Education/ Grade: ---------------------------------------------------------------

53

Brief Description of your business: ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(Please give only an answer to each question by using circle or cross to each box below for Yes! or No! or No response) S/No 1 Variable Is a book - keeping of accounts used? Category Yes No No response 2 Is it detailed enough to give adequate management information? 3 Is a double entry book - keeping system used? Yes No Non response Yes No Non response 4 Does the owner understand the form and contents of the financial statements? Yes No Non response 5 Does the owner use budgets and cash projections, Yes No Non response 6 Are comparative financial statements producing? Yes No Non response 7 Are the financial books and records kept up - to - date and balancing? Yes No Non response 8 Are reasonable due dates imposed? Yes No Non response 9 Is access to accounting records restricted when appropriate? Yes No Non response 10 Are annual vacations required? Yes No Non response 11 Are storage facilities safe from fire, etc? Yes No Non response 12 Is there a records retention schedule used? Yes No Non response Comments/Remarks

54

13

Are job references checked?

Yes No Non response

14

Is there a policy for credit approval?

Yes No Non response

15

Have credit files kept current?

Yes No Non response

16

Does credit checks done regularly?

Yes No Non response

17

Have insurance coverage regularly reviewed?

Yes No Non response

18

Are employees bonded?

Yes No Non response

19

Are sales orders approved for: Prices, terms, credits and limits?

Yes No Non response

20

Are all sales orders recorded on pre-numbered forms and are all numbers accounted for?

Yes No Non response

21

Are sales invoices compare to shipping documents?

Yes No Non response

22

Are sales invoices records promptly?

Yes No Non response

23

Is credit memos pre-numbered, accounted for, approved?

Yes No Non response

24

Are monthly statements for outstanding balances review by the owner; mailed by the owner or responsible employee other than the bookkeeper?

Yes No Non response Yes No Non response

25

Is accounts receivable subsidiary ledger balance monthly to control account?

55

26

Do small businesses have inadequate knowledge and skills in financial management?

Yes No Non response

27

Can the effectiveness of financial management for small businesses be measure?

Yes No Non response

28

Has financial management for small businesses been effective in the fast?

Yes No Non response

29

Can the effectiveness of financial management of small businesses be explained?

Yes No Non response

30

Is an aging schedule of customers' accounts prepared monthly and Have write-offs and other adjustments for customer accounts authorized by the owner?

Yes No Non response

Appendix 2: the Analysis of the study Questionnaires

S/No

Variable

Category

Rubkona County N % 2 4 0 3 2 0 1.33 2.67 0.00 2.00 1.33 0.00

Mayom County N 1 4 1 0 5 0 % 1.00 4.00 1.00 0.00 5.00 0.00

Leer County N 4 4 2 2 6 2 % 2.00 2.00 1.00 1.00 3.00 1.00

Ruweng County N 1 2 2 1 4 1 % 2.00 4.00 4.00 2.00 8.00 2.00

Total

%

1

Is a book - keeping of accounts used?

Yes No No response Yes No Non response

8 14 5 6 17 3

6.33 12.67 6.00 5.00 17.33 3.00

2

Is it detailed enough to give adequate management information?

56

3

Is a double entry book - keeping system used?

Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response

1 4 0 4 1 0 3 1 1 3 1 1 1 3 1 2 1 2 3 2 0 2 3 0 1 4 0 0 5 0 0 5 0 1 4 0

0.67 2.67 0.00 2.67 0.67 0.00 2.00 0.67 0.67 2.00 0.67 0.67 0.67 2.00 0.67 1.33 0.67 1.33 2.00 1.33 0.00 1.33 2.00 0.00 0.67 2.67 0.00 0.00 3.33 0.00 0.00 3.33 0.00 0.67 2.67 0.00

2 3 0 1 3 1 0 3 0 1 2 0 0 3 0 1 2 0 1 2 0 0 3 0 0 2 1 0 3 0 0 3 0 0 3 0

2.00 3.00 0.00 1.00 3.00 1.00 0.00 3.00 0.00 1.00 2.00 0.00 0.00 3.00 0.00 1.00 2.00 0.00 1.00 2.00 0.00 0.00 3.00 0.00 0.00 2.00 1.00 0.00 3.00 0.00 0.00 3.00 0.00 0.00 3.00 0.00

2 6 2 2 4 4 2 4 0 0 6 0 2 4 0 4 2 2 2 3 2 2 4 0 2 4 0 0 4 2 2 3 2 2 0 4

1.00 3.00 1.00 1.00 2.00 2.00 1.00 2.00 0.00 0.00 3.00 0.00 1.00 2.00 0.00 2.00 1.00 1.00 1.00 1.50 1.00 1.00 2.00 0.00 1.00 2.00 0.00 0.00 2.00 1.00 1.00 1.50 1.00 1.00 0.00 2.00

1 3 1 1 3 1 0 3 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0

2.00 6.00 2.00 2.00 6.00 2.00 0.00 6.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00

6 16 3 8 11 6 5 11 1 4 10 1 3 11 1 7 6 4 6 8 2 4 11 0 3 11 1 0 13 2 2 12 2 3 8 4

5.67 14.67 3.00 6.67 11.67 5.00 3.00 11.67 0.67 3.00 7.67 0.67 1.67 9.00 0.67 4.33 5.67 2.33 4.00 6.83 1.00 2.33 9.00 0.00 1.67 8.67 1.00 0.00 10.33 1.00 1.00 9.83 1.00 1.67 7.67 2.00

4

Does the owner understand the form and contents of the financial statements?

5

Does the owner use budgets and cash projections,

6

Are comparative financial statements producing?

7

Are the financial books and records kept up - to - date and balancing?

8

Are reasonable due dates imposed?

9

Is access to accounting records restricted when appropriate?

10

Are annual vacations required?

11

Are storage facilities safe from fire, etc?

12

Is there a records retention schedule used?

13

Are job references checked?

14

Is there a policy for credit approval?

57

15

Have credit files kept current?

Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response Yes No Non response

2 3 0 1 4 0 0 3 2 3 2 0 0 2 3 1 4 0 2 3 0 2 3 0 0 3 2 1 4 0 1 3 1 1 4 0

1.33 2.00 0.00 0.67 2.67 0.00 0.00 2.00 1.33 2.00 1.33 0.00 0.00 1.33 2.00 0.67 2.67 0.00 1.33 2.00 0.00 1.33 2.00 0.00 0.00 2.00 1.33 0.67 2.67 0.00 0.67 2.00 0.67 0.67 2.67 0.00

1 2 0 0 3 0 0 3 0 0 3 0 0 2 1 0 1 2 0 1 2 0 3 0 0 3 0 0 2 1 0 3 0 0 3 0

1.00 2.00 0.00 0.00 3.00 0.00 0.00 3.00 0.00 0.00 3.00 0.00 0.00 2.00 1.00 0.00 1.00 2.00 0.00 1.00 2.00 0.00 3.00 0.00 0.00 3.00 0.00 0.00 2.00 1.00 0.00 3.00 0.00 0.00 3.00 0.00

2 2 2 0 4 2 2 4 0 0 4 2 2 4 0 2 4 0 0 4 2 0 4 2 2 4 0 2 2 2 0 4 2 2 2 2

1.00 1.00 1.00 0.00 2.00 1.00 1.00 2.00 0.00 0.00 2.00 1.00 1.00 2.00 0.00 1.00 2.00 0.00 0.00 2.00 1.00 0.00 2.00 1.00 1.00 2.00 0.00 1.00 1.00 1.00 0.00 2.00 1.00 1.00 1.00 1.00

0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 1 0 0 1 0 1 0 1 0 0 1 0 0 1 0

0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 2.00 0.00 0.00 2.00 0.00 2.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00

5 8 2 1 12 2 2 11 2 3 10 2 2 9 4 3 10 2 2 9 4 3 10 2 3 10 3 3 9 3 1 11 3 3 10 2

3.33 7.00 1.00 0.67 9.67 1.00 1.00 9.00 1.33 2.00 8.33 1.00 1.00 7.33 3.00 1.67 7.67 2.00 1.33 7.00 3.00 3.33 7.00 1.00 3.00 7.00 3.33 1.67 7.67 2.00 0.67 9.00 1.67 1.67 8.67 1.00

16

Does credit checks done regularly?

17

Have insurance coverage regularly reviewed?

18

Are employees bonded?

19

Are sales orders approved for: Prices, terms, credits and limits?

20

Are all sales orders recorded on prenumbered forms and are all numbers accounted for?

21

Are sales invoices compare to shipping documents?

22

Are sales invoices records promptly?

23

Is credit memos pre-numbered, accounted for, approved?

24

Are monthly statements for outstanding balances review by the owner; mailed by the owner or responsible employee other than the bookkeeper? Is accounts receivable subsidiary ledger balance monthly to control account?

25

26

Do small businesses have inadequate knowledge and skills in financial management?

58

27

Can the effectiveness of financial management for small businesses be measure?

Yes No Non response Yes No Non response Yes No Non response Yes No Non response

2 3 0 1 3 0 1 4 0 2 3 0

1.33 2.00 0.00 0.67 2.00 0.00 0.67 2.67 0.00 1.33 2.00 0.00

1 2 0 1 2 0 0 3 0 1 3 0

1.00 2.00 0.00 1.00 2.00 0.00 0.00 3.00 0.00 1.00 3.00 0.00

0 4 2 0 4 2 0 4 2 0 4 2

0.00 2.00 1.00 0.00 2.00 1.00 0.00 2.00 1.00 0.00 2.00 1.00

0 1 0 0 1 0 0 1 0 0 1 0

0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00 0.00 2.00 0.00

3 10 2 2 10 2 1 12 2 3 11 2

2.33 8.00 1.00 1.67 8.00 1.00 0.67 9.67 1.00 2.33 9.00 1.00

28

Has financial management for small businesses been effective in the fast?

29

Can the effectiveness of financial management of small businesses be explained?

30

Is an aging schedule of customers' accounts prepared monthly and Have write-offs and other adjustments for customer accounts authorized by the owner?

1 Total 150 00.00 100 100.00 200 100.00 50

100.00 500 400.00

Appendix 3: Self-assessment and definition whether to pursue growth 59

The following points should be considered when evaluating whether growth is reasonable for your business. A. 1. Personal Do you have the time to undertake the activities associated with growth and the time the larger business volume will consume? 2. 3. 4. B. 1. 2. 3. 4. 5. 6. 7. Does your family support your efforts to expand the business? Is your personal financial position congruent with the financial situation of the company? Does your management ability correspond to that necessary to manage growth? Financial Management Does your business have the equity level to justify growth? If not, do you have potential sources of equity? Has your business been profitable or shown the potential for profitability? Will your bank be able to cooperate with you in your growth phase? Is the collateral position of the business adequate to meet the requirements of lenders? Do accounting procedures allow you to maintain control of the business? What contingency plans do you have if your initial attempts fall short? Have you researched sources of government-assisted funding? 60

8. 9. 10. 11.

Do you have knowledge of how cash flow interacts in your business to ensure future cash flow? Do you have support people who understand finance? Will the rate of return justify the commitment of resources? Will the value of the business grow?

Appendix 4: Lessons learned from the study

From the implementation of this project we have learned that following: a. Among the main causes of informality are poverty, unemployment, low, unqualified labor, lack of opportunities, bureaucracy, red tape costs, among others. b. Formalization is a growing concern specially in developing economies. It is important to note that from recent studies it has been noted that the informal sector is expanding rapidly. c. Informal sector is the important source of employment d. Feasible policy due to political support and that it is economically feasible. e. Formalization of Micro-enterprises requires the establishment of mechanisms to reduce entry barriers, through reducing red tape. This also will require the establishment of definitions and legal, labor, tax conditions that must implemented as a whole. f. Government policies must not only take into considerations the effects of informality, but instead must deal with the causes of it. 61

g. There are new approaches and tools for small scale enterprise formalization h. Importance of forming alliances with international cooperation i. Informality makes it difficult to access financial in opportune manner. This force Micro-enterprises to seek alternative sources of financing which deteriorates in some cases their financial capabilities because in terms of debt these sources are very costly. This is why it very important that formalization process includes more access to information, so Micro-enterprises learn about the benefits of being formal and its relation with the access of financing. j. The informal sector in some economies is not necessarily composed of subsistence units and not all the sector is in urban areas. In the other hand, there is still some confusion with self-employed, sub employed and informal worker. As well as there are some theoretical differences and also regarding definitions, which makes it necessary to reach a consensus in order to seek common policies that can applied to each economy. k. Learning about new financial resources and programs to support Micro-enterprises.

Appendix 5: Study Time Table from October 2006 – April 2007

62

References
ACTIVIT Y Week number 1.Holiday 2.Read literature 3.Finalise objectives 4.Draft literature review 5.Read methodol ogy literature 6.Revise research approach 7.Draft literature strategy and method 8.Develop questionn aire 9.Pilot test and revise 10.Admini ster questionn aire 11.Enter data into computer 12.Analys e data 13.Draft findings chapter and Update literature read 14. Complete remaining chapters and Submit to tutor and await feedback 15. Revise draft, format for submissio n 16. Print and Final submissio n 1 October 2006 2 3 4 1 November 2006 2 3 4 5 1 December 2006 2 3 4 1 January 2007 2 3 4 5 February 2007 1 2 3 1 2 March 2007 3 4 5 1 2 April 2007 3 4 5

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Eugene F, B., & Louis C, G (1985): Financial Management: Theory and Practice. Richard, D. IRWIN Inc. 4th Edition. USA. J. Kammack, (2000) Financial Management for development. INTRAC P O Box 563, oxford, OX2 6RZ, UK. James, C., Van Horne (1971): Financial Management & Policy. Eighth edition. Prentice Hall Inc. USA. Jarskog, H. (1999) Improve your business. ILO Publications, 4 route des Morillons, CH-1211 Geneva 22, Switzerland. Joy, O. Maurice (1980): Introduction to Financial Management. Richard, D. IRWIN Inc. USA. McKee, K. (1989) “Micro level Strategies for Supporting Livelihoods, Employment, and Income Generation of Poor Women in the Third World: The Challenge of Significance,” World Development. Mishima, M. (1994) “Examining USAID’s Micro-enterprise Assistance Program as a Tool for Poverty Reduction” (M.A. research essay). Ottawa: Carleton University. Otero, M. (1989) “Breaking Through: The Expansion of Micro-Enterprise Programs as a Challenge for NonProfit Institutions” (Monograph Series No. 4) Washington, D.C.: Accion International, October. Robert, C., Higgins (1984): Analysis for Financial Management. Published by Richard, D. IRWIN Inc. USA. Stanley, B., Block (1984): Foundation of Financial Management. Third edition. Published by Richard, D. IRWIN Inc. USA. Thornhill, A., Lewis, P., & Saunders, M (2003)”Research Methods for Business Students”. Pearson Education Limited, Edinburgh Gate, Harlow Essex CM20 2JE, England. Tuladhar, J. (1996) “Factors Affecting Women Entrepreneurship” in Small and Cottage Industries in Nepal, Opportunities and Constraints. Vincent, F. & P, Campbell (1989)”Towards Greater financial Autonomy”. ITP Publications, London.

Bibliography

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Ashe, J. (1995) “Strategies for Financing Micro-enterprises:” The Working Capital Model. (Working Paper) Ottawa: Carleton University (Centre for Study of Training, Investment and Economic Restructuring). Dessing, M. (1990) “Support for Micro-enterprises” Lessons for Sub-Saharan Africa Technical Paper Number 122. Washington, D.C.: World Bank. Devereux, S. et al. (1987) “A Manual of Credit and Savings for the Poor of Developing Countries”. Oxford: Oxfam-UK. Goonting, Dennis H. (1995) “An Impact Evaluation Study of Micro-Credit Intervention” the Case of the Production Credit for Rural Women Programme in Nepal, Major research paper. Hunt, W. (1985) “Private Voluntary Organizations and the Promotion of Small-Scale Enterprise” Washington, D.C.: USAID. Hurley, D. (1990) “Income-Generation Schemes for the Urban Poor.” Oxford: Oxfam. Khan, N. (1984) “Income generating activities for women in Pakistan” Why some succeed, why some fail (Article prepared for Ideas and Action FFHC/Action for Development), Lahore. Levitsky, Jacob. 1989) “Micro-enterprises in Developing Countries” London: Intermediate Technology Publications. McGregor, J. A. (1994) “Financial disenfranchisement: the hazards of financial liberalisation and NGO led development,” Insights. Sussex: ODI/IDS.

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