Abstract:
This article reports the work done after exploring the challenges faced by both the Small and Medium Enterprises (SMEs) and the banking industry in the management of finances; especially the payment of utility bills and suggests an e-framework that can enhance banking experience for SMEs as well as enhance financial gain for the banks. With the advent of newer and innovative computer based technologies such as agent banking, mobile banking and internet banking over the last decade; e-finance generally has become more of a reality than a dream as most financial institutions have moved with encouraging speed to embrace this innovation. Further, this technological revolution is meant to increased access to personal information that potential lenders would normally rely on in granting credit to their customers as well as provision of a unique platform for the management of the SME subsector. The specific objectives of the study were to: Examine the potential benefits brought about by ICT as an interface for SME – bank interaction; Assess the role of steadfastness in financial management in instilling financial discipline in SMEs; Explore the willingness of financial institutions in implementing unique SME solutions; Develop an e-framework through which SMEs can channel their daily earnings to enhance financial management; Suggest the integration mechanisms of the e-framework to existing financial systems. Survey research design was used and a population of 10 banks and 100 SMEs formed the sampling frame. The sample for the study consisted of 5 banks and 30 SMEs selected using random sampling. Primary data was collected using questionnaire and direct interviews. Secondary data was collected from reports of past research. The questionnaires were pilot tested for validity and reliability. Quantitative data was analysed using descriptive statistics and presented using tables and percentages. Qualitative data was derived from reading the responses of the hypothetical questions and placed in categories fitting the research questions. The findings of this research established that SMEs do indeed face challenges in managing their finances and would greatly welcome a bank-led solution to overcome these challenges. From these findings, it is recommended that banks and the micro-finance industry work together to develop appropriate information technology that will help ease the burden of managing their revenue and expenditure.
