Most proponents of a strong small-scale enterprise (SSE) sector assert that SSE continues to suffer from a lack of proper financial management. However, the crux of the problem lies not with the SSE but in the training efforts in this sector. It is rooted in the inability of advisers to distinguish between the goal they have established (better financial management) and the methods they have chosen to achieve this goal (financial accounting). In the minds of many advisers and trainers, financial management is synonymous with financial accounting; or they are so intimately linked that the former is impossible without the latter. These misconceptions are held by experts and beginners alike, so much so, that many studies casually refer to a problem in one (lack of capital, poor cost control) as the logical outcome of the other (poor record-keeping) (Institute for Small-Scale Industries, 1983, p. 19).The implementation of an accounting system for any enterprise requires an analysis and assessment of the organizational and environmental factors which influence the design and effectiveness of accounting systems. This paper attempts such an analysis, with regard to the financial accounting systems currently offered to small enterprise. The misconceptions trainers possess about financial accounting, and the problems that arise, are examined with reference to the stated goal of improved financial management for the firm. Finally, it recommends the abandoning of such systems in favour of a different approach to financial management, and describes how such an approach can be used successfully by the trainer in the field.
After three years of experimenting with, and developing, mechanisms which will directly benefit the rural poor, CARE Maradi in Niger has decided to narrow its activity focus down to credit and technical training. It is these two components that have generated real client interest, shown the best results, and have the greatest promise for sustainability. The second phase of the project will now consist entirely of improving the effectiveness and efficiency of these activities and developing them into two sustainable institutions: a rural bank and a vocational training facility. This article describes some of the lessons learned from the first three-year phase, current programming and an analysis of the future prospects for the project.
Targeting credit to particular income groups, and establishing collateral and training as qualifications for getting a loan have been regarded as essential ingredients of credit programmes aimed at the poor, and to protect their capital from defaulters. This article argues that restricting credit to certain groups prevents lending institutions from reducing their risks with diversified portfolios. Instead, groups which have been discriminated against in the past, such as women, should be helped to overcome the obstacles to gaining credit. In addition, training should not be used as a prerequisite to receiving a loan, since most small businesses have already learned the hard way the rudiments of survival in a developing country economy.