Assessing financial management skills among spaza shop owners in Mamelodi Township, South Africa

Abstract

The study assessed informal spaza shop business owners' finance management skills. The assessment may lead to more fluid practical interventions that may help informal businesses to improve their operations, grow and ultimately formalise their businesses. The composite measures for the study were expense tracking skills, cash flow management skills, calculating profit skills and finance skills needs. A new questionnaire was developed because no available instrument perfectly addressed the problem. The choice of methodology in the informal sector is limited, characterised by a lack of resources and databases from which to choose. Therefore, non-probability convenience sampling was employed for the study. The study outcome revealed that spaza shop business owners know the importance of finance management skills. However, there was low confidence and knowledge in accurately executing these tasks, indicating a gap between recognising the value of the skills and applying them in practice.