Analysis of micro business financial and accounting systems in Osun State

Mrs Mopelola Margaret Adeyeye, Finance Officer

Finance Department, Centre for Energy Research and Development

Obafemi Awolowo University,

Ile-Ife  220005 

Tel: +234-803-721-9921  E-mail:

Website: http://

Mr Abiodun S. Momodu, Research Fellow

Energy Technology and Management, Centre for Energy Research and Development

Mrs Ayodola O. Olomola, Chief Accountant

Bursary , Obafemi Awolowo University

Type of Presentation: Workshop

Aims: The aim of the study is to present financial and accounting procedures amongst rural female micro-business operators in Osun State

Background: Rural female business operations thrive in Nigeria. Though there is paucity of data, Akinbami (2010) posits that women get engaged in businesses with the intention to augment earnings in their respective homes. For this reason, these women usually do not have formal accounting systems even though they operate some form of payment modes that reflects a system of discernable financial transactions. In other works by Adeyeye et al (2010) it is reported that women are valuable resource for entrepreneurship development and economic growth of Nigeria. The study further reports that growth of women entrepreneurs is limited due to the fact that some basic services important to their expansion is lacking. Rutashobya (1995) reports that women engage in businesses that are in harmony with their traditional roles, which happens to be least profitable.

Action: To generate empirical data for analysis, the study was carried out in purposively selected local government areas (LGAs) of Osun State. A multi-stage sampling technique was used in selecting six (6) communities. Structured questionnaire and Focus Group Discussion (FGD) were used to capture primary data. Descriptive and comparative data analysis techniques appropriate for examining the questions are employed.

Results: By the way their businesses are operated presently, rural entrepreneurs have no formal financial and accounting system. However, they indicated that seasonally, they require what they consider as ‘quite a relatively large lump sum’ of between N1,400 (£6 equivalent) and N7,500 (£32.32 equivalent) capital base to engage in their business. Due to lack of access to finance, the women rely on middlemen’s fund called agbaale (bail out) as a viable option. This bail out is a form of informal credit facility being extended to the rural female entrepreneur by a middle-man or woman. The characteristics of agbaale are: no paper work or formal record of the transaction which is usually a verbal agreement; prices of products are fixed based on season’s prevailing market rate in the agreement with the credit facility provider; and the fixed prices are capped irrespective of developments in the market in the subsequent seasons of the production of the food products in focus to the detriment of the rural female entrepreneur.

Lessons: To enhance business performance amongst rural entrepreneurs, there is need to establish a simple and track-able financial and accounting system them.

Keywords: payment, accounting, rural business

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