Small scale businesses/enterprises play a vital role in developing as a well as developed countries, this is added to the ongoing reforms by the Central Bank of Nigeria for a sustainable financial literacy framework for small and medium scale enterprises (SMEs) in the country.The significance of this study therefore lies in the attempt to document the factor that is truly critical to the profitability of small scale enterprises but which has not been appreciated, recognized or factored into the various incentive schemes and policy measures being put up for SSEs in the state and nation at large.
The critical factor is financial literacy among SSEs which is a pivotal requirement to its success and profitability. In addition, this research will equip owners of small scale enterprises by encouraging them to give the keeping of proper accounting records a greater priority in the objectives of their business. With this, adequate information about the business would be accurately known. Also awareness will be created in this study on the urgent need to improve on the financial literacy level of SSE owners as well as improve on their accounting practices. This will help formalize their business operations in a way that will suit their little nature.Furthermore, apart from the result of the study contributing to the “knowledge bank” of small scale enterprises, it will stimulate more researchers into this area since the research literature work in this field is still minimal.