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ReserarchID
RX88R
Crossref Journal DOI 10.17406/GJHSS
Print ISSN 0975-587X
e-ISSN 2249-460X
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Globally SMEs have been known as engines of growth. However, the performance of SMEs has been seriously challenged, especially in developing countries such as Tanzania. This study aimed at analyzing the factors influencing financial records keeping amongst SMEs in Ilala municipality using mainly primary data from 130 respondents. Both descriptive analysis and regression analysis using a binary Probit model were employed. Descriptive analysis shows that, about 90% of the respondents were keeping financial records for their business and the commonly records kept by SMEs were cash books, debtors books, and sales day books while purchase day books, creditor’s books, and petty cash book were rarely kept. The probit regression results indicate that, membership, age of the firm, location of the firm, the size of the firm (capital invested and number of employees) and years of schooling are significant factors that affect financial records keeping in SMEs. All in all, financial record keeping is still a major challenge for many SMEs in Tanzania, therefore measures such as awareness raising and provision of education and training on financial records keeping should be taken so as to improve the capacity and level of understanding on records keeping, use and report preparation. The Government and private sector should collaborate to improve and enhance the capacity of SMEs in record keeping, business management, accessing market and venturing into existing and new opportunities.
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