UNIVERSITY OF GHANA COLLEGE OF EDUCATION SCHOOL OF INFORMATION AND COMMUNICATION STUDIES DEPARTMENT OF INFORMATION STUDIES RECORDS MANAGEMENT AND SMALL AND MEDIUM ENTERPRISE IN GHANA: A CASE STUDY OF SEKONDI-TAKORADI METROPOLITAN AREA BY ANTHONY TAWIAH SAMMOR (10210547) THIS THESIS IS SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF MPHIL IN INFORMATION STUDIES DEGREE JULY, 2022 University of Ghana http://ugspace.ug.edu.gh i DECLARATION I do hereby declare that this thesis is my own original work and that it has not been submitted either in whole or in part to any institution for any degree. Where references are made to works of other researchers, due acknowledgements are given. Finally, I wish to state that I take full responsibility for all shortcomings, misinterpretations, and weaknesses that may be. identified in this work. DEDICATION ………………………. ANTHONY TAWIAH SAMMOR (STUDENT) 21/12/2023 DATE ………………………… PROF. EMMANUEL ADJEI (PRINCIPAL SUPERVISOR) 21/12/2023 DATE ………………………… DR. MUSAH ADAMS (CO-SUPERVISOR) 21/12/2023 DATE University of Ghana http://ugspace.ug.edu.gh ii I dedicate this work to the Almighty God, my late mother, and the entire family. ACKNOWLEDGEMENT University of Ghana http://ugspace.ug.edu.gh iii I have an unavoidable obligation to express my sincere and profound gratitude to all who supported me to successfully complete this study. Firstly, I would like to wholeheartedly thank the Lord God Almighty for His abundant grace, protection, and support, which enabled me to successfully complete this study. I wish to express my sincere appreciation and gratitude to my supervisors, Prof. Emmanuel Adjei and Dr. Musah Adams, for their exhaustive and constructive criticisms, suggestions, guidance, and advice, without which the completion of this work would not have been possible. I am sincerely indebted to Dr. Monica Mensah Danquah, who complemented the work of my supervisors. Her assistance was invaluable. God richly bless you all. My sincere thanks also go to the enterprises in Sekondi-Takoradi which spent their precious time to participate in the study. This work would not have been possible without their much- need welcome and participation. I thank my entire family for their concern and encouragement. Finally, I thank my colleagues at work for helping me in diverse ways, particularly Paapa Kwamina Fynn and Yaw Tekyi Enchill. God bless you all. University of Ghana http://ugspace.ug.edu.gh iv TABLE OF CONTENTS DECLARATION…………………………………………………………………… i DEDICATION……………………………………………………………………… ii ACKNOWLEDGEMENT…………………………………………………………… iii TABLE OF CONTENTS…………………………………………………………….. iv LIST OF TABLES……………………………………………………………………. ix LIST OF FIGURES…………………………………………………………………... x ABBREVIATIONS…………………………………………………………………... xi ABSTRACT………………………………………………………………………….. xiii CHAPTER ONE……………………………………………………………………. 1 INTRODUCTION……………………………………………………………………. 1 1.1 Background to the study…………………………………………………...…. 1 1.2 Statement of the problem…………………………………………………….. 6 1.3 Purpose of the study……………………………………………….…………. 7 1.4 Objectives of the study……………………………………………………… 7 1.5 Scope and limitation of the study……………………………………………. 8 1.6 Theoretical Framework………………………………………………………. 8 1.6.1 The Decision Usefulness theory……………………………………… 9 1.6.2 The Records Life Cycle Theory and Records Continuum Model……. 10 1.7 Significance of the study……………………………………………………… 13 1.8 Limitation of the Study……………………………………………………….. 14 1.9 Organization of Chapters……………………………………………………... 15 CHAPTER TWO …………………………………………………………………… 16 Literature Review…………………………………………………………………….. 16 2.1 Introduction…………………………………………………………………… 16 2.2 Definition of SME……………………………………………………………. 17 University of Ghana http://ugspace.ug.edu.gh v 2.2.1 Classification of SMEs in Ghana……………………………………... 18 2.3 SMEs at the Global level……………………………………………………... 20 2.4 SMEs in Africa……………………………………………………………….. 22 2.5 Evolution and Development of SMEs in Ghana……………………………… 23 2.5.1 Overview of SMEs in Ghana…………………………………………. 25 2.6 Contribution of SMEs to the economy of Ghana…………………………….. 26 2.7 Government and external assistance to SMEs in Ghana…………………… 29 2.8 Records Management ………………………………………………………... 31 2.8.1 Managing Records: records creation to deposition …………………... 33 2.8.1.1 Records creation and use…………………………………... 33 2.8.1.2 Records Inventory…………………………………………. 33 2.8.1.3 Records Appraisal…………………………………………. 34 2.8.1.4 Records retention and disposition…………………………. 35 2.8.2 Records ……………………………………………………………….. 36 2.8.2.1 Financial records to be kept by SMEs 37 2.8.2.1.1 Purchase account 38 2.8.2.1.2 Sales account 38 2.8.2.1.3 Creditor’s account / Account payable 38 2.8.2.1.4 Debtors account 38 2.8.2.1.5 Cash account 39 2.8.2.1.6 Stock account 39 2.8.2.1.7 Financial statement 39 2.9 Types of record created and kept by SMEs…………. 39 2.10 Records management training and competencies of managers of SMEs……………………………………………………………. 47 University of Ghana http://ugspace.ug.edu.gh vi 2.11 Relationship between records management and SMEs performance…………………………………………………………………... 51 2.12 Challenges SMEs faces with records keeping………………………………………………………………………... 55 2.13 SUMMARY…………………………………………………………………... 58 CHAPTER THREE…………………………………………………………………. 61 RESEARCH METHODOLOGY………………………………………………...…... 61 3.1 Introduction…………………………………………………………………… 61 3.2 Research approach……………………………………………………………. 61 3.3 Research design………………………………………………………………. 62 3.4 Study setting………………………………………………………………….. 64 3.4.1 Kofad Ventures………………………………………………….......... 66 3.4.2 Kendricks Pharmacy…………………………………………….......... 66 3.4.3 Asamoah Engineering………………………………………………… 66 3.4.4 Carlos Plus Super Market……………………………………….......... 67 3.4.5 Ever Merciful Ventures………………………………………….......... 67 3.5 Selection of subjects………………………………………………………….. 68 3.5.1 Population…………………………………………………………….. 68 3.5.2 Sample size / Sample size selection………………...………………… 69 3.6 Data collection instrument……………………………………………………. 72 3.6.1 Interviews……………………………………………………………... 72 3.6.1.1 Pre-testing…………………………………………………… 75 3.7 Data collection procedures……………………………………………………. 75 3.8 Data presentation and analysis………………………………………………... 76 University of Ghana http://ugspace.ug.edu.gh vii 3.9 Ethical considerations………………………………………………………… 77 CHAPTER FOUR…………………………………………………………………... 78 ANALYSIS AND FINDINGS……………………………………………………….. 78 4.1 Introduction…………………………………………………………………… 78 4.2 Results of interviews with managers…………………………………………. 79 4.2.1 Demographic profile of SMEs managers……………………………... 79 4.2.2 Records keeping by SMEs……………………………………………. 81 4.2.3 Types of records generated and kept by SMEs……………………….. 81 4.2.3.1 Records creation…………………………………………… 82 4.2.3.2 Records maintenance and use……………………………… 83 4.2.3.3 Records appraisal and disposal…………………………….. 84 4.2.4 Training and competencies of SMEs in records management………... 85 4.2.5 Relationship between records management and performance of SMEs 87 4.2.6 Challenges SMEs face with records keeping…………………………. 92 4.3 Results of interviews with other SME officers………………………………. 92 4.3.1 Types of records generated and kept by SMES……………………… 93 4.3.2 Record management training and competence………………………. 95 4.3.3 Relationship between records management and SMEs performance... 96 4.3.4 Challenges with records keeping……………………………………... 99 CHAPTER FIVE……………………………………………………………………. 100 DISCUSSION OF FINDINGS……………………………………………………….. 100 5.1 Introduction…………………………………………………………………… 100 5.2 Recordkeeping by SMEs……………………………………………………. 100 University of Ghana http://ugspace.ug.edu.gh viii 5.3 Demographic details………………………………………………………….. 101 5.4 Types of records SMEs create and maintain…………………………………. 101 5.4.1 Records creation………………………………………………………. 102 5.4.2 Records storage ………………………………………………………. 106 5.4.3 Records and filing…………………………………………………….. 106 5.4.4 Records maintenance and use………………………………………… 107 5.4.4.1 File plan………………………………………………….. 107 5.4.4.2 Fire detection and suppression…………………………… 108 5.4.4.3 Climate control in the records storage area……………… 108 5.4.4.4 Disaster management plan……………………………….. 109 5.4.5 Appraisal and disposal………………………………………………... 109 5.5 Training and competence of SME managers in records management………. 110 5.6 Relationship between records management and performance of SMEs ……... 114 5.7 Challenges of SMEs face with recordkeeping……………………………… 119 CHAPTER SIX……………………………………………………………………… 124 SUMMARY OF FINDINGS, CONCLUSION, AND RECOMMENDATIONS……. 124 6.1 Introduction…………………………………………………………………… 124 6.2 Summary of findings…………………………………………………………. 124 6.2.1 Types of records SMEs create and maintain………………………….. 125 6.2.2 Records management training and competences of SME managers…. 126 6.2.3 Relationship between records management and performance of SMEs 127 6.2.4 Challenges SMEs face with records keeping.………………………... 127 6.3 Conclusion……………………………………………………………………. 128 6.4 Recommendations…………………………………………………………….. 129 University of Ghana http://ugspace.ug.edu.gh ix 6.4.1 Education by GEA………………………………………………….. 129 6.4.2 Orders from Regulatory Bodies…………………………………… 129 6.4.3 Public Records and Archives Administration Department (PRAAD) to provide training………………………………………………….. 129 6.4.4 Award for Best Record Keeper……………………………………. 130 6.4.5 Employing Professionals…………………………………………... 130 6.5 Recommendation for future research…………………………………………. 130 REFERENCES……………………………………………………………………….. 131 APPENDIX…………………………………………………………………………... 148 INTERVIEW SCHEDULE…………………………………………………………... 149 University of Ghana http://ugspace.ug.edu.gh x LISTS OF TABLES Table 1 Research objective and their theoretical attributes…………………… 13 Table 2 Definition of SMEs used by the World Bank………………………… 19 Table 3 MSME classification in Ghana……………………………………….. 20 Table 4 Table 5 SMEs at Global Level………………………………………………… Characteristics of selected SMEs……………………………………... 23 69 Table 6 Population and categories of SMEs in the Sekondi-Takoradi Metropolitan Area…………………………………………………….. 71 Table 6.1 Selection criteria for SMEs………………………………… 73 Table 7 Demographic profile of SME managers……………………………… 82 Table 8 Relationship between records management and SME performance….. 91 Table 9 Demographic profile of the officers…………………………………... 95 University of Ghana http://ugspace.ug.edu.gh xi LIST OF FIGURES FIGURES 1 SMEs contribution to the Ghanaian and Global Economies………... 28 FIGURES 2 Employment Distribution from SMEs Segments…………………… 29 University of Ghana http://ugspace.ug.edu.gh xii LIST OF ABBREVIATIONS APEC ASU Asian Pacific Economic Cooperation Actual Sampling Unit CBD Central Business District ESARBICA Eastern and Sothern Africa Regional Branch of the International Council of Archives EU European Union GDP GEA Gross Domestic Product Ghana Enterprises Agency GSS Ghana Statistical Services HND Higher National Diploma IASB International Accounting Standards Board IFC International Finance Corporation ILO International Labour Organization IRMT International Records Management Trust ISO International Organization for Standardization IT Information Technology MMDA Metropolitan Manila Development Authority MSME MSE Micro, Small and Medium Enterprises Micro and Small Enterprises MTI Ministry Of Trade and Industry NBSSI The National Board for Small-Scale Industries NHIS National Health Insurance Scheme OECD Organization Of Economic Coo-Operation Development PRAAD Public Records and Archives Administration Department University of Ghana http://ugspace.ug.edu.gh xiii PSU Primary Sampling Unit RM Records Management SME SSSCE SSU Small and Medium Enterprises Senior Secondary School Certificate Examination Secondary Sampling Unit STMA Sekondi-Takoradi Metropolitan Assembly UNCTAD United Nations Conference on Trade and Development UNIDO United Nations Industrial Development Organization VAT Value Added Tax University of Ghana http://ugspace.ug.edu.gh xiv ABSTRACT Small and Medium Enterprises (SMEs) play significant role in the socio-economic growth of both developing and developed countries. Their contribution in terms of employment creation, wealth creation, poverty reduction, and sustenance of socio-economic growth and development has been recognized globally. The development and performance of SMEs, therefore, is of maximum importance in all countries. SMEs need accurate, reliable, and timely information to survive and grow. They also need to create and manage their business records properly because both large and small enterprises can hardly survive without effective and efficient record keeping. Therefore, the study explored the records management practices of SMEs in the Sekondi- Takoradi Metropolitan Area. The main objective was to find out the types of records the SMEs generate and maintain, determine the records management training and competences of the SME managers, establish the relationship between records management and performance of SMEs and find out the challenges the SMEs face with records management. The study was guided by the Decision Usefulness Theory, the Records Life Cycle Theory, and the Records Continuum Model. The study adopted the qualitative approach and case study design, with five SMEs purposively selected for the study. Data gathered through semi- structured interviews were analysed through thematic analysis. The study found out that the SMEs create and keep financial, administrative, and operational records both in paper and electronic formats; that the SME managers and employees who keep records do not have qualifications, training, and competences in records management; that University of Ghana http://ugspace.ug.edu.gh xv there is a strong relationship between records management and performance of SMEs; that the SMEs face some challenges with record keeping, notable among them being lack of knowledge and competence in record keeping. The study recommended that Ghana Enterprises Agency (GEA), formerly National Board for Small Scale Industries (NBSSI) should educate the SMEs on the need to keep records; that regulatory bodies of SMEs should make it mandatory for SMEs to keep records; that arrangements should be made for Public Records and Archives Administration Department (PRAAD) to regularly train SMEs in record keeping; that awards should be given regularly to SMEs for proper record keeping, in order to encourage them to keep records; that SMEs should attach importance to record keeping and employ professionals to manage their records. University of Ghana http://ugspace.ug.edu.gh 1 CHAPTER ONE INTRODUCTION 1.1 Background of the Study Small and medium-sized enterprises (SMEs) are crucial to the socioeconomic development of both industrialized and developing nations. They have received widespread recognition for their contribution to sustaining socioeconomic growth and development and creating jobs, wealth, and reducing poverty. They have been identified as stepping stones for industrialization (Muchira, 2012).The development and performance of SMEs, therefore, is of maximum importance to all countries. Eniola and Entebang (2014) note that many people throughout the world, including development economists, business owners, non-governmental organizations, governments, and financial institutions are very concerned about how well SMEs are performing. According to the Asian-Pacific Economic Cooperation (APEC) (2014) enhancing the performance of SMEs would have a significant impact on a nation's socioeconomic development and rate of growth. Hence, identifying and providing solutions to the problems of SMEs in order to maximize performance is crucial. As pointed out by the Ministry of Trade and Industry (MTI) of Ghana (2019), one of the main problems of SMEs is their difficulty in securing capital, which has been identified as resulting from the SMEs’ inability to keep proper records of their business transactions, which makes it difficult for them to provide good financial information required by financial institutions to provide capital (McCannon, 2002; Dwomo, 2012). Ayyagari, Demirguc-Kunt and Maksimovic (2011) state that over 95% of businesses worldwide are thought to be SMEs, which account for about 60% of all employment in the private sector. About 76% of the workforce in Europe consists of SMEs, (Rathnasiri, 2014). University of Ghana http://ugspace.ug.edu.gh 2 Business Statistics (2021) of the UK Parliament indicate that there were 5.6 million SMEs in the UK in 2021, which was over 99% of all businesses. Micro, small, and medium-sized businesses form the vast majority of active businesses in the European Union (EU), produce more than 50% of total revenue, and generate two out of every three private sector employment (MTI of Ghana, 2019). More than 95% of businesses in the Organization of Economic Co- operation and Economic Development (OECD) nations are SMEs, which provide on average two-thirds of the nations’ gross domestic product. (OECD, 2017). SMEs account for more than 90% of private firms in developing nations and economies in transition, contribute more than 50% of employment and GDP, and employ 22% of the adult population (MTI of Ghana, 2019). SMEs act as catalysts for growth in developing nations, particularly in the areas of local entrepreneurship, income generation and job creation, for the purpose of reducing poverty. SMEs play a key role in Ghana's economic development and growth. SMEs have been recognized as a significant, critical sector that fosters economic expansion and social advancement. They include economic activities in sectors including construction, agriculture, manufacturing, mining, and service provision and are a significant source of employment, revenue production, and regional development. In Ghana, SMEs account for the vast majority of businesses. They have grown through time into substantial service and supply companies for large national and international corporations (Aryeetey, 2001). According to Ghana's Ministry of Trade and Industry, SMEs dominate the nation's industrial landscape and have a lot of promise for accelerating the economic growth required to increase wealth and reduce poverty. Over 80% of the workforce and more than 70% of the nation's production in Ghana are supplied by SMEs. They make up 92 percent of enterprises in Ghana, are responsible for 85% of manufacturing jobs, and provide roughly 70% of the country's GDP (MTI, 2019; Aryeetey, 2001). University of Ghana http://ugspace.ug.edu.gh 3 There is disagreement over what exactly qualifies as a small or medium firm among researchers and authors. Because what is small in one country may be medium or even large in another country. Therefore, there is no universally agreed definition of the term SME. Different authors and institutions have given varying definitions of SMEs based on the value of assets, number of employees, size of capital, and value of sales. Some define SMEs in terms of skill of labour. Others base their definitions on legal status and method of production. According to Ademola, Olukotun, and Okore (2012) small and medium-sized businesses are typically defined by their number of employees, scale size, asset value, or amount of bank deposits. Different definitions of SMEs have been provided in Ghana. The most typical is how many staff there are (Kayanula and Quartey, 2000). While recognizing the critical role SMEs play in national development, it should also be admitted that for SMEs to succeed in their business ventures they need accurate, reliable, and timely information at the lowest possible cost. Thus, they have to properly keep their business records. Organizations, both small and large, need to properly manage their records, just as they manage their human and other resources. Businesses, both small and large, can hardly survive without recordkeeping. According to Beyenne (2004), by empowering business owners to make wise decisions, protect their companies from failure, and track and assess their success, good recordkeeping benefits SMEs. Through proper recordkeeping businesses are able to increase profitability, ensure return on investment, boost market shares, meet standards, and improve facilities. Accurate records of a company can be used to track performance in certain areas. Accounting records serve as the foundation for a complete and accurate income tax calculation, good future planning, and talks University of Ghana http://ugspace.ug.edu.gh 4 with partners, possible investors, and lenders. These are all crucial elements that improve a company's performance (Mitchell, 2000). The International Records Management Trust (IRMT), (2009), is of the view that the goal of records management is to manage and control business records at every stage of their life cycle, including creation, distribution, filing, use, and eventual disposal or permanent retention. Retention, storage, and disposal of records are only a small part of records management. It includes every recordkeeping need and set of rules for policy that enables a company to develop and keep control over the management of information flow. In the developed economies, Records management has been acknowledged as a factor in the growth and performance of businesses. The ability of micro, small, and medium-sized businesses in the European Union (EU) to maintain records management standards reportedly improved their business operations. It also provided quick and easy access to records, which enhanced service delivery. (Webster, Hare, and McLeod, 1999). According to Webster et al (1999) in Europe, it was noted and stressed that businesses that maintained records outperformed those that neglected to implement effective records management practices. It can be inferred from this that records management is a contributing factor to the success of SMEs in the 34 countries in the OECD and other developed countries. Successful SMEs have contributed significantly to the development of the economies of their countries through good recordkeeping. Fredric (2005) noted that the growth of many countries was not provided by big companies only, but also by micro, small, and medium enterprises. He added that these enterprises have boosted the economies of countries like USA, UK, Japan, Germany, China, and Brazil. University of Ghana http://ugspace.ug.edu.gh 5 In most (EU) member states, Micro, Small and Medium Enterprises (MSMEs) considerably maintain records, and even use information technology (IT) to optimise their recordkeeping. For instance in the United Kingdom (UK), MSMEs have realized that after management and training, records management is third in importance for corporate improvement (Webster, Hare, and McLeod, 1999; Borglund, Anderson, Walberg, Sanberg, 2009). But most SME owners and managers in Africa do not see recordkeeping this way. Danford et al (2014) stated that studies showed that the majority of Tanzania's SMMEs managed their operations without taking the effects of recordkeeping on them into account. According to Okafor (2012), the majority of SME managers and owners in Nigeria view their companies as their personal matters and do not feel the need to be transparent or accountable to anyone. Mbona, Mwaipopo, and Phitemon (2010) observed that instead of concentrating on recordkeeping, most small, micro, and medium business owners spend their time focusing on purchasing and manufacturing. Fatoki and Van Aardt Smit (2011) observed that one of the difficulties SMMEs in South Africa face is recordkeeping. In Ghana the situation is not different from what pertains to other African counties. Studies show that the greater number of SMEs fail to keep records of their business transactions. Reasons for this include lack of awareness of the role recordkeeping plays in business and inability to manage records (Amoako, 2013; Dawudu and Azeko, 2015; Yusif, Kusi, and Ismail, 2019l). This study was conducted in the Sekondi-Takoradi Metropolitan Area of the Western Region of Ghana in order to assess the records management practices of the SMEs and the role these practices play in the performance and growth of the SMEs. University of Ghana http://ugspace.ug.edu.gh 6 1.2 Statement of the Problem A major problem of SMEs in Ghana is how to create and manage records of their transactions. Some do not even keep records of their transactions at all. According to Agbemava (2016), most SMEs do not maintain records. Karunanda and Jayamaha (2011) stated that the key issues facing SMEs include low-quality and unreliable financial data, inadequate recordkeeping, and poor use of accounting data to support financial decision-making. Lack of accurate and reliable records makes it difficult for SMEs to raise equity capital from financial institutions (McCannon, 2002; William, 2008). The result of this is that about 60% of SMEs fold up before they are five years old (Boachie-Mensah and Marfo-Yiadom, 2005). On the other side, good recordkeeping benefits SMEs by empowering business owners to take wise business decisions, guarantee business survival, and track and assess business success. (Beyenne, 2004). SMEs in developing countries encounter challenges with records management. In a study conducted by Kemoni (2009) it was observed that most Eastern and Southern African countries lack the ability to maintain records effectively. He claimed that insufficient infrastructure and lack of training capacity among recordkeeping staff are barriers to efficient records management. Based on a study conducted in Uganda, Okello-Obura (2012) found out that small businesses lacked requisite training and skills to manage records. Managers of some SMEs see modern records management as time-consuming, expensive, and requiring technical knowledge, which they do not have (Amoako, 2013). This shows the low educational levels and lack of technical know-how of some of the owners/mangers of SMEs in developing countries. University of Ghana http://ugspace.ug.edu.gh 7 The researcher, through observation and numerous interactions with some SME managers and staff in the Sekondi-Takoradi Metropolitan Area (STMA), realized that there were weaknesses in the records management practices of the SMEs and that they could be encountering challenges or problems with records management. Furthermore, so far the researcher, in reviewing literature on the subject area, has realised that most of the studies were on financial records management. Consequently, this study sought to examine records management holistically in the SMEs in order to fill a knowledge gap and to evaluate the records management practices of the SMEs and the effect these practices have on their performance, profitability and growth. 1.3 Purpose of the Study The purpose of the study was to examine the records management practices of the SMEs in the Sekondi-Takoradi Metropolitan Area and how these impact their business performance. 1.4 Objectives of the Study The specific objectives of the study are: 1. To identify the types of records created and maintained by the SMEs. 2. To find out the records management training and competencies of managers of the SMEs. 3. To establish the relationship between records management and performance of SMEs. 4. To find out the challenges faced by the SMEs in managing their records. University of Ghana http://ugspace.ug.edu.gh 8 1.5 Scope of the Study The study was limited to SMEs in the Sekondi-Takoradi Metropolitan area of the Western region of Ghana. The main cities in the area are Sekondi and Takoradi. Sekondi is the regional capital of the Western region. Sekondi-Takoradi has many businesses, including oil companies and SMEs. There are 13 districts in the Western Region available for the study. Sekondi-Takoradi was chosen because it is the leading business place in the region with thousands of businesses of all types and sizes. The researcher was of the opinion that well-established SMEs that have been in business for long and could provide relevant information for the work could be found in Sekondi-Takoradi. 1.6 Theoretical Framework According to Creswell (2003) a theoretical framework is made up of a chosen theory (or theories) that underpins the reasoning on how the subject is interpreted and expected to be studied, as well as the principles and interpretations that refer to the subject and variables that need to be observed from that theory. It is the foundation on which knowledge for a research is built. The research was guided by the decision-usefulness theory, the records life cycle theory, and the records continuum model. 1.6.1 The Decision Usefulness Theory (DUT) According to Williams (2009), the idea of decision usefulness has received significant attention in research in accounting and has become the accepted yardstick for evaluating the efficacy of University of Ghana http://ugspace.ug.edu.gh 9 accounting and financial reporting. The American Accounting Association committee introduced the decision usefulness theory in 1966. The theory states that the decision- usefulness of the accounting information should be the primary consideration when selecting an accounting measurement method. In other words, the more helpful accounting information given to the user, the more accurately the user can predict economic and financial events. Hence businesses have to properly keep and manage records of their transactions so that they can provide information useful to the users of the information including venture capitalists, financial institutions, and government. The theory is relevant to the study since SMEs are required to provide useful, relevant, accurate, and reliable accounting information to qualify for financial assistance. According to the notion of decision usefulness, accounting is the process of giving pertinent information to the right decision-makers. The theory is relevant to this research because it outlines a formal process by which a person can decide wisely in situations of uncertainty. The SME managers are supposed to keep an eye on their commercial dealings as well as make proper decisions which can help increase profits for their companies. Decision usefulness also takes the view that “if we cannot prepare theoretically correct financial statements, at least we can try to make financial statements more useful” (Dandago and Hassan, 2015). Relating this to the study, if SME managers cannot prepare theoretically correct financial records, they can at least provide useful financial records required by financial institutions to provide funds for their businesses. The profitability and success of all businesses depend largely on decisions made in the course of business transactions as stated by the decision usefulness theory. The decision usefulness University of Ghana http://ugspace.ug.edu.gh 10 theory emphasizes the importance of recording commercial transactions in order to make good business decisions. Recording means there have to be systems, resources, and personnel to manage the recorded information. This brings in records management or recordkeeping in business. Ademola et al (2012) contend that recordkeeping is crucial in the management of business. They add that “recordkeeping involves identification, classification, storage and protection, receipt and transmission, retention and disposal of records or transfer to the archives” and that “in recordkeeping, policies, systems, procedures, operations and personnel are required to administer records”. Without these requirements, there cannot be any meaningful recordkeeping. 1.6.2 The Records Life Cycle Theory and Records Continuum Model The record life-cycle concept, developed by Theodore Shellenberg in the United States of America in 1934, as stated by Shepherd and Yeo (2003, p. 5), recognizes the various phases of the life of a record. The theory of the life cycle is that all recorded information has life similar to a biological organism. That is, a record is born, (creation phase), lives, (maintenance and use phase, and dies (disposition phase) (Penn et al, 1994; Shepherd, 2010). The records life cycle has served as the primary conceptual framework for maintaining records, particularly in the context of paper environments since the 1930s. According to Akussah (1996) as cited by Chachage and Ngulube (2006) the life cycle concept is acknowledged globally as the most integrated and thorough method of records management by archivists and records management professionals. According to the records life cycle, records can only exist once at each stage of their lives, each stage having records management functions. Many different variations of the records life cycle University of Ghana http://ugspace.ug.edu.gh 11 concept have been developed since the 1950s, most of which show the various actions taken at each stage of the life of a record, that is, its creation, capture, storage, use, and disposal. According to Penn, Pennix, and Coulson (1994), there are five key stages to a record's life cycle: creation, distribution, usage, maintenance, disposal, and transfer to archives. According to Stephen (2007) in the UK the records life cycle is often thought to make up of at least three phases. These include: ▪ Current records stage: records at this stage are called current or active records. They are regularly needed and referred to for daily business of an enterprise or organization and are kept close to their users. ▪ Semi-current stage: records at this stage are called semi-current records. They are the records that are losing their value with the passage of time and as such are not frequently required for daily business. They are moved to the records centre for less expensive storage awaiting their final disposal. ▪ Non-current or inactive stage: at this stage records are called non-current records. These are no longer needed for any business transaction and have to be destroyed. The few non-current records that never lose their value are sent to an archive for permanent preservation for historical or research purposes. The records life cycle has suffered some criticisms, leading to a preference for the continuum theory. The continuum theory, which was developed by Ian MacLean in the 1990s, on the other hand, argues that the life of the record is not divided in time and space by the process of recordkeeping, but is an ongoing and continuous operation (Upward, 2000). Maclean argued that there is a relationship between the archival and records management professions as well as a continuity between the two professions. The continuum theory has been characterized in University of Ghana http://ugspace.ug.edu.gh 12 ways that suggest it is a time/space approach rather than a life of the records approach, claims Upward (2003). There are no strict boundaries in the continuum approach. An (2001), a proponent of the continuum theory, points out that the records continuum model has acquired recognition on a global scale as the best approach for the management of archives and records, including electronic records. In spite of the prominence gained by the continuum theory, it is noteworthy that the life cycle approach continues to be relevant to managing records and archives. Instead of rejecting the records life cycle, it is best to think of the records continuum as an extra technique that can be used to manage electronic records. It should be realized that even in the digital age paper does not cease to be useful. Paper is still seen as the format for administrative documentation (Igwoku, 2008). This, coupled with the fact that in Ghana, and especially at the SME level, manual systems still prevail, make the life cycle theory more relevant to the study. Shepherd and Yeo (2003, p. 10) affirm that because it still provides a helpful framework, the life cycle approach is still relevant to records management. Table 1. Research Objectives and their Theoretical Attributes Research Objective Theoretical Attributes Instruments To identify the types of records the SMEs create and maintain The decision usefulness theory emphasizes the creation of relevant, reliable, comparable, and understandable records Interview University of Ghana http://ugspace.ug.edu.gh 13 To find out the records management training and competencies of the SME managers To carry out the records management functions of identification, retention and disposal of records throughout their life cycle, qualified personnel is needed. ISO 15489-1-2016 Interview To establish the relationship between records management and performance of SMEs Decision useful information and proper records management following the life cycle theory have positive impact on business Interview To find out the challenges faced by the SMEs in managing their records SMEs need systems, resources, and personnel to manage their records throughout their life cycle. Ademola et al (2012) Interview 1.7 Significance of the Study The study could help improve the performance of many SMEs in Ghana. There are many managers and owners of SMEs who do not keep proper records of their activities, simply because they are unaware of the significant role information plays in business. When owners and managers of SMEs become aware that the success of their operations depends largely on University of Ghana http://ugspace.ug.edu.gh 14 the information they possess and how well they manage and utilize it, they will put measures in place to properly manage their records. The rippling effect of this will be: • SMEs will be able to provide accurate, reliable, and timely information to financial institutions and other stakeholders. • The availability of required information will make it easy for SMEs to secure equity capital. The inability of some SMEs to survive has been attributed mainly to lack of finance. With the needed financial assistance, SMEs have a high probability of succeeding and thus be able to contribute meaningfully to the Ghanaian economy. • With the requisite information managers of SMEs will be able to assess their performance and make proper decisions, which will in turn increase performance and profitability. Besides the SMEs, other enterprises in the Metropolis and policy makers will benefit from the study. Policy makers do conduct research, so they can make informed decisions that will be beneficial to all. The study will be of considerable benefit to other researchers and students by adding to the literature and knowledge on records management practices of SMEs. 1.8 Limitations of the Study It was a difficult task for the researcher to get participants for the study. Most of the SME managers contacted in the central business district (CBD) turned down the researcher’s requests to participate in the study, on the grounds that they were too busy with their businesses. It was obvious that having a large population for the study would not be possible. Therefore the researcher intended to purposively select ten SMEs for the study, but only five were willing University of Ghana http://ugspace.ug.edu.gh 15 to participate. To conduct an in-depth study of record keeping practices of the SMEs, the researcher had intended to interview all employees of each selected SME who keep records, but this was not possible as some of them were not available and others were too busy to grant interviews. 1.9 Organization of Chapters The study was organized into six chapters. Chapter one was the introductory chapter where background to the study, statement of the problem, purpose of the study, objectives of the study, scope of the study, theoretical framework, and significance of the study will be covered. Chapter 2 consisted of the Literature Review. Empirical works will be reviewed in order to highlight global, African, and Ghanaian views of the relationship between records management and SMEs. Chapter 3 dealt with the Research Methodology and will cover the research design, study setting, selection of cases, selection of subjects, instrumentation, and ethical consideration. Chapter 4 focused on Analysis and Findings. Chapter 5 was on Discussion of Findings. Chapter 6 concluded the study with the Summary of Findings, Conclusion and Recommendations. University of Ghana http://ugspace.ug.edu.gh 16 CHAPTER TWO LITERATURE REVIEW 2.1 Introduction According to Ramdhani, Ramdhani, and Amin (2014), a literature review is a survey of academic books, papers, and other materials pertinent to a certain topic, field of study, or theory, and it offers a description, a synopsis, and a critical assessment of these works. It involves systematically identifying and analysing documents that contain information and existing studies that relate to a phenomenon under investigation (Kuranchie, 2021). Literature review requires extensive reading about the topic being investigated. This provides researchers with knowledge, skills, and information needed to carry out a study (Kuranchie, 2021). Literature reviews provide an overview of sources that have been explored while researching a particular topic. Reviewing the literature enables a researcher to demonstrate to readers how a research fits into a larger field of study (Ramdhani, Ramdhani and Amin, 2014). It also makes researchers know what has been done and what has not been done, which approaches were appropriate and which were not. Reviewing existing literature helps researchers to plan their work and fully explain a topic (Booth, Papaioannou and Sutton, 2012). This chapter presents the definition of SME, a general overview of SMEs at the global level, in Africa, and in Ghana. This is followed by a review of theoretical and empirical literature on records management and its effect on the performance of SMEs. 2.2. Definition of SME University of Ghana http://ugspace.ug.edu.gh 17 There are various definitions of SME by different individuals or organizations according to their perceptions. There is no universally accepted definition of SME due to lack of generally acceptable yardstick for determining the smallness or otherwise of an enterprise. Whether a firm is micro, small, medium, or large, depends on the general economic status and industrial development of a country. According to the International Labour Organization (ILO, 2015), there is no single definition that can encompass all the characteristics of micro, small, medium, or large firms. These depend on the level of development of a country. The ILO (2015) noted, for instance, that a business with less than $100,000 in annual revenue would likely be considered a microbusiness in the United States but might very well be considered a medium-sized company in other nations. It defines micro businesses as those having not more than ten employees, small businesses as those having ten to 100 employees, and medium-sized businesses as those having 100 to 250 employees. According to Wach (2015), the World Bank uses a two-tiered approach to categorize SMEs. It either uses national classifications or its own definition. The World Bank definition of SMEs, as stated by Wach (2015), uses three classification criteria: 1. Annual average employment. 2. Total assets. 3. Annual turnover. For an entity to be included in the SME sector, it has to fulfil at least two of the criteria. Table 2: Definition of SMEs used by the World Bank University of Ghana http://ugspace.ug.edu.gh 18 Criterion Small Enterprises Medium Enterprises Annual average employment Fewer than 50 workers Fewer than 300 workers Total assets Less than USD 3 million Less than USD 15 million Annual turnover Less than USD 3 million Less than USD 15 million Source: Krzysztof Wach (2015), University of Economics, Krakow, Poland. The main characteristics used globally to categorize enterprises, according to Oshagbemi (1985, in Abor and Quartey, 2010), include: sales value, number of employees, financial strength, comparison with past standards, relative size, type of industry, initial capital outlay, and independent ownership. The United States Committee for Economic Development for Small Businesses states that characteristics of small enterprises include at least two of the following: capital was supplied by owners; managers of the business are also owners; location of business is primarily local; and business being small in size. 2.2.1 Classification of SMEs in Ghana Unlike South Africa, Ghana does not have a National Act that provides a framework for defining SMEs (Abor and Quartey, 2010). Internationally, entities considered to be small and medium are much larger than their counterparts in Ghana. This, besides other things, is a reflection of the relatively small economy of Ghana. In Ghana the most crucial factor used to determine an enterprise's size is the number of employees (MTI, 2019). The Ministry of Local Government and Rural Development for instance considers any firm that employs one to nine employees as a small scale enterprise, 10 to 20 employees as a medium scale enterprise, and above 20 employees as a large scale enterprise. University of Ghana http://ugspace.ug.edu.gh 19 Another criterion used to define micro, small, and medium enterprises in Ghana is the value of fixed assets of the firm. Micro firms are those businesses in both the manufacturing and service sectors that employ five people or whose fixed assets do not exceed US$10,000, excluding land and buildings, according to the Ghana Statistical Service (GSS). Small-scale businesses are those with 6 to 29 employees or fixed assets worth less than $100,000, medium-sized businesses have 30 to 99 employees, and large-scale businesses have at least 100 employees as shown in Table 3. Table 3: MSME Classification in Ghana Enterprise Category Employment Size (Permanent Staff) Turnover Assets Micro 1 - 5 ≤ US$25,000 ≤ US$25,000 Small 6 – 29 US$25,001 - US$1,000,000 US$25,001 - US$1,000,000 Medium 30 – 99 US$1,000,001 - US$3,000,000 US$1,000,001 - US$3.000,000 Source: Researcher’s construct The Ghana Enterprises Agency (GEA), formerly the National Board for Small Scale Industries (NBSSI), which is mandated to oversee the development of SMEs in Ghana, uses both the value of fixed assets and number of employees to define SMEs. It describes a small scale enterprise as a firm with not more than nine workers and has plant and machinery (excluding University of Ghana http://ugspace.ug.edu.gh 20 land, building, and vehicles) not exceeding10 million Ghana cedis. The classification of SMEs by GEA is as follows: • Micro Enterprises: those employing between one and five employees with fixed assets not exceeding US$10,000, excluding, vehicles, land, and buildings. • Small Enterprises: those employing 6-29 employees and have fixed assets not exceeding US$100,000, excluding vehicles, land, and buildings. • Medium Enterprises: those employing between 30 and 99 employees with fixed assets of up to 1 million US dollars, excluding vehicles, land, and buildings. 2.3 SMEs at the Global level The importance of SMEs has been recognized by many countries worldwide. SMEs contribute to national development through job creation and innovation. Data from the European Union (EU) indicate that 85% of net employment creation is attributable to SMEs with between one and 250 employees, including enterprise entries and exists (J. de Kok et al, 2011, in ILO, 2015). SMEs account for about 95% of all enterprises in the OECD countries (OECD, 2000, in ILO, 2015). They have the ability to innovate, that is, produce new products and develop new processes, even though they might not be as innovative as larger firms (Johnson, 2008; Edmiston, 2007). Whether SMEs create more jobs than larger enterprises is a subject of debate (Carree and Thurik, 1998, in ILO, 2015). Nevertheless, many studies show that small and medium enterprises create a higher number of jobs than larger ones. For instance Ayyagari et al (2011) and Neumark, Wall, and Zhan (2008) conducted studies in the United States of America. The results show that small businesses had higher job creation rates than larger businesses. Using a data set from all private industries to determine if small businesses generate more jobs, Neumark et al (2008) discovered that while large businesses had net employment University of Ghana http://ugspace.ug.edu.gh 21 generation rates as low as 2%, those with less than 100 employees had net employment generation rates around 8%. Small businesses in the United States of America contributed to the economy's competitiveness, innovation, and job creation throughout the 1990s economic crisis. (Audretsch, 2002). SMEs in the Asian and South-Pacific nations were a significant source of employment over the same time period. In Thailand, SMEs contributed about 9% of the increase in employment, compared to larger companies' rate of approximately 4% to 6%. (Anil, 2003). Statistics from Eurostat (2005) indicate that a vast majority of enterprises in Europe are SMEs. The total number of non-financial business firms in European countries was projected to be 19.65 million, according to data from Eurostat (2005). 98 % of these enterprises were SMEs. 67.1 percent of all employment in the private business sector was in the SME sector. Approximately 92 percent of all SMEs in Europe were micro firms with fewer than 10 employees. In North America and Asia, similar trends are observed as shown in Table 4. Table 4: SMEs at Global Level University of Ghana http://ugspace.ug.edu.gh 22 2.4 SMEs in Africa SMEs are an important source of employment creation, income generation, and poverty reduction in Africa. Their contribution to socio-economic development cannot be overemphasized. SMEs form 95% of all firms in Sub-Saharan Africa. According to Kaufmann (2006) the SME sector is particularly significant since it takes a straightforward approach to meeting the needs of the majority of Africans by providing affordable goods and services at fair terms and prices, in addition to serving as a source of income and employment. According to Chepkoech and Nassium (2019), the contribution of SMEs to the economy of Kenya continues to grow since the sector was made popular by the International Labour Organization (ILO) in 1972. They contend that SMEs are significant and trustworthy sources University of Ghana http://ugspace.ug.edu.gh 23 for boosting the economy, eradicating poverty, and expanding the industrial base. There are 7.5 million SMEs in Kenya, according to Chepkoech and Nassium (2019), and they have contributed more to the country's GDP than any other sector, rising from 13.8 percent in 1993 to roughly 40 percent in 2008 and continuing to do so. Economic studies show that employment in the SME sector increased from 7,942 million people in 2008 to 9,272 million in 2011, and to 10.5 million in 2012, accounting for 82 percent of all people working outside of small-scale agriculture and pastoral activities, according to Kenya Central Bureau of Statistics (2012). Economic Survey (2013) revealed that 591.4 thousand new jobs were produced in the SME sector in 2012, compared to 587.2 thousand in 2011, making up 89.7 percent of all new jobs created in 2012. The sector offers goods and services, encourages creativity and innovation, and strengthens the entrepreneurial culture. It contributes 20% of the GDP. Tanzania had, according to the International Finance Company (IFC) of the World Bank (2012), over 2.7 million businesses. 98 percent of these were micro firms (having less than 5 employees). According to Ghasia et al. (2017), SMEs have made a substantial contribution to the growth of the Tanzanian economy by generating income, opening up employment possibilities, and reducing poverty. They continue by stating that the SME sector is thought to account for one-third of Tanzania's GDP. 2.5 Evolution and Development of SMEs in Ghana Small scale businesses began gaining prominence in the early 1960s, when many personal enterprises started springing up. In the 1960s President Nkrumah made efforts to modernise the economy of Ghana through a combination of state-owned industries and major foreign University of Ghana http://ugspace.ug.edu.gh 24 investments or joint ventures while reducing the role of the local private sector in the industrialisation process. To him the local sector was not apt to the task, and secondly, he did not want it to grow and oppose him. But small scale industries, according to a sample survey in 1963, were already widespread in Ghana, employing some 184,000 workers in the manufacturing sector, or 17% of total non-agricultural employment. Large-scale firms employed nearly 32,000 or three percent. By 1973, these figures had doubled, with small scale firms accounting for 85% of manufacturing employment, even though they contributed only about a quarter of Ghana’s manufacturing value-added. As time went on the large-scale firms grew significantly. Ghanaian entrepreneurs had moved into industrial enterprises that were once the preserve of foreign firms and the state. Industrial statistics show that the number of large-scale industries owned by Ghanaians quadrupled from 1962 to 1982. These large-scale import-dependent firms, however, had their capacity utilization drastically reduced due to lack of foreign exchange. Rising inflation and declining real earnings were added to these, which led many modern sector workers to engage in self- employment activities in order to supplement their income. The economy's decline between 1970 and 1984 made employment in large-scale manufacturing to stagnate. Small scale businesses and employment, on the contrary, grew at 2.9% per annum and, although employing almost ten times as many people as the large-scale sector, only contributed roughly a third of the value added (Steel and Webster, 1991). In 1981, the Ghanaian government acknowledged the value of the micro and small business sector and its contribution to economic growth. As a result, Act 434 of the Parliament established the National Board for Small Scale Industries (NBSSI). The Act did not go into effect until 1985. The Cottage Industries and Rural Housing Department and the Ghana University of Ghana http://ugspace.ug.edu.gh 25 Enterprises Development Corporation, (which was created expressly to support Ghanaian- owned businesses in Ghana, including micro, small, and medium-sized businesses) were incorporated in the NBSSI in1990 in an effort to defragment MSME support initiatives in Ghana (MTI, 2019). 2.5.1 Overview of SMEs in Ghana About 90% of registered businesses are SMEs, according to data from the office of the Registrar General (MTI (Ghana), 2019). Since there is no data on all SMEs and the majority of SMEs operate in the informal sector and are unregistered it is impossible to determine the precise number of SMES in Ghana (Mensah, 2004). Some of them are registered at the Metropolitan Assemblies, the Internal Revenue Service, and, sometimes, the VAT Service. Additionally, the well-established ones are registered at the Registrar General's Department (Mbroh, 2011). There are no accurate statistics on SMEs in Ghana due to inconsistent definitions, the expense of conducting industrial censuses, and many SMEs choosing not to register and continue to operate outside of the formal economy (UNCTAD, 2005). Most SMEs in Ghana do not take it easy to secure equity capital from financial institutions. The reasons are lack of proper accounting records, resulting from poor records management systems, and limited participation compared to larger enterprises in local and international capital markets (Ackah and Vuvor, 2011). With the exception of a few, most of them are not able to engage in export trade since a lot of money is required for that and the fact that some of the managers have minimal levels of education, training, and awareness. As a result, they provide services and products for the local markets. Most of them operate manually, because they lack technical and technological competence (Ackah and Vuvor, 2011). University of Ghana http://ugspace.ug.edu.gh 26 According to Amoako (2013) in Ghana most SMEs are owned by single individuals. The owner/manager makes all the major decisions concerning the business, usually has low level of education, weak management skills with limited knowledge of technology and the credit market. He adds that most SME owners/managers sometimes think they have no need to keep records of their operations because they do not have to render account to anyone. SMEs operate in different areas such as construction, mining, manufacturing, retail trade, and service delivery. SMEs in Ghana include barbershops and hair salons, clothes and tailoring stores, retail stores, grocery stores, dining establishments, carpentry shops, and small-scale producers of various goods like sachet water, foot wares etc (Kayanula and Quartey, 2000). 2.6 Contribution of SMEs to the economy of Ghana As in other African countries, SMEs in Ghana play a major role in boosting the national economy, especially in the areas of employment creation, income generation, poverty reduction, and diffusion of intermediate technology. According to official data, the private sector, which is primarily made up of SMEs, contributes roughly 40% of Ghana's Gross National Income (GNI). SMEs (GSS, 2012). As indicated by the 2010 Population and Housing Census, about 86% of the population are in the private informal sector, which is dominated by SMEs (GSS, 2012).. They produce roughly 70% of GDP and account for 85% of manufacturing jobs in Ghana. (Ayeetey, 2001). As shown in Figure 1, SMEs are much more important in Ghana, where they account for over 80% of University of Ghana http://ugspace.ug.edu.gh 27 employment (versus 67% globally) and over 70% of private sector output (versus 52% globally). A similar percentage to the global norm, roughly 90% of enterprises in Ghana are thought to be SMEs. (MTI, 2019). Figure 1: SME Contribution to the Ghanaian and Global Economies Source: NBSSI, SME Support Services Strategy (2015-2020) The contributions of micro, small, and medium-sized firms to the total number of businesses and employment vary. The majority of active businesses are micro enterprises, as seen in figure 2. However, by definition, they contribute the fewest jobs per business. Figure 2: Employment Distribution from SME Segments University of Ghana http://ugspace.ug.edu.gh 28 Source: NBSSI, SME Support Services Strategy (2015-2020) Currently, it is estimated that there are 2.1 million businesses in Ghana. Out of these, about 1.7 million can be classified as micro enterprises. Micro enterprises employ about 2.5 million people (30% of all MSME employees), meaning that each micro enterprises creates an average of 1-2 jobs. The small enterprise category follows the micro enterprise category and comprises 15% of all SMEs. It has roughly 320 000 enterprises and accounts for 23% of all MSME jobs (1.9 million employees). This implies that small enterprises create an average of approximately 6 jobs per enterprise. Finally the medium enterprise category comes with around 85,000 medium enterprises, making up 4% of all SMEs and contributing 47% of the total MSME employment (approximately 3.9 University of Ghana http://ugspace.ug.edu.gh 29 million jobs). This suggests that each medium-sized business creates, on average, 46 new jobs (MTI, 2019). 2.7 Government and external assistance to SMEs in Ghana Numerous programmes have been developed by governments around the world to improve SME lending, including favourable or subsidized credit lines, guarantees, and loans provided by particular financial institutions, particularly governmental banks, generally for particular industries. This is done in recognition of the significant role SMEs play in developing a nation's economy. (Stephanou and Rodriguez, 2008). These assistance programmes take the form of credit guarantee programess and interest rate discounts provided to SMEs. (DE la Torre et al, 2008). Government assistance for SMEs is required because of several market imperfections that prohibit domestic businesses from advancing their capacities because they lack access to capital, knowledge, technology, and markets (UNCTAD, 2005). To help SMEs overcome these setbacks, special policies, programmes, and institutional frameworks are therefore required. Government efforts at promoting SMEs are to make markets work efficiently. Additionally, it is to encourage the private sector to actively participate in SME funding (IFC, 2011). Economic research has shown that businesses with credit restrictions are less likely to engage in growth- promoting activities including investment, marketing, employing, exporting, and importing, necessitating help from intervention (Holton et al, 2013). In Ghana, there have been numerous sponsorship programmes funded by past and present governments, through banking and non-banking institutions, in order to minimise financial constraints (Amonoo et al, 2003). However, only high-performing businesses with competent University of Ghana http://ugspace.ug.edu.gh 30 workers and promising futures can take advantage of these support programs (Baah-Nuakoh, 2003). In Ghana a number of lending schemes to SMEs have been implemented by governments either directly from public funds or with funds contracted from donor agencies. These schemes include: Austrian Import Program (1990), Japanese Non-Project Grants (1987-2000), Canadian Structural Adjustment Fund, and Support for Public Expenditure Reforms (SPER), (Mensah, 2004). Other schemes implemented to support the private sector, especially SMEs, were Business Assistance Fund (BAF) (1990), Ghana Investment Fund (GIF) (2002), and Export Development and Investment Fund (EDIF). The Fund for Small and Medium Enterprises Development (FUSMED) was also established in 1990 by the International Development Association of the World Bank to support SMEs, help establish new firms, rehabilitate and expand existing ones, and lease equipment (Baah-Nuakoh, 2003). Besides these, other important non-banking institutions were established to promote the development of SMEs. Some of these are National Board for Small Scale (NBSSI) (1985), Empresas Technologicas (EMPRETEC) Ghana Foundation and Microfinance and Small loans Centre (MASLOC). When compared to the average interest rate offered by private commercial banks, these institutions' interest rates are often lower, set around 20%. (Amonoo et al, 2003). However, small enterprises face challenges with accessing these schemes. The challenges are: (1) high collateral requirements; (2) these programmes demand complicated legal procedures as part of application process; (3) the loan schemes are centralised in Accra, making it challenging for SMEs outside Accra to access them (Baah-Nuakoh, 2003). University of Ghana http://ugspace.ug.edu.gh 31 Programmes to help the MSME sector in Ghana are now being developed by a number of stakeholders including NGOs, private sector associations, government ministries, departments, and agencies, and development partners. However, the issue is that these institutions lack the necessary resources, including staff, equipment, and operating finances, to carry out their prescribed duties and establish the appropriate enabling environment for the industry. (MTI, 2019). 2.8 Records Management Records management entails the management of records, irrespective of their age, in order to serve the demands of both public and private sector organizations, as well as the general public and the research community. It gains a position in an organization’s life through contributing both organizational and business goals (Elizabeth and Geoffrey, 2003). The ISO 15489 defines records management as the “field of management responsible for the efficient and systematic control of the creation, receipt, maintenance, use and disposition of records, including processes for capturing and maintaining evidence of and information about business activities and transactions in the form of records” (ISO 15489-1, 2016, Clause 3.15). According to the ISO 15489-1-2016, managing records involves: ▪ Creating and capturing records that can be used as evidence of business activity; ▪ Taking appropriate measures to protect their authenticity, reliability, integrity and useability as their business context and requirements for their management change over time. University of Ghana http://ugspace.ug.edu.gh 32 The ISO 15489-1-2016 identifies numerous benefits of records management, which include: ▪ Improved transparency and accountability: Managing records improves transparency and accountability, as records are made available to serve as evidence. ▪ Informed decision-making: Proper management of records enables business leaders, heads of institutions, organizations, governments, and policy makers to make proper decisions based on facts and figures. The availability of authentic and reliable records through proper records management makes decision makers know what went wrong and right, so they can make the right decisions without repeating past mistakes. ▪ Management of business risks: The availability of authentic, reliable, and useable records enables organization to avoid risks and manage risks when they do occur. ▪ Continuity in the event of disaster: records management makes it possible to retrieve vital records after a disaster so that operation can continue. ▪ Protecting the obligations and rights of individuals and organizations: records are needed to protect the obligations and rights of individuals and organizations, so they have to be properly managed to make them readily available. ▪ Protection and support in litigation: records are needed in litigations to serve as evidence, so they have to be captured and maintained to make them available for litigations. ▪ Reduction of cost through greater efficiency: managing records enhances efficiency which reduces cost. The right decisions are taken at the right time to prevent unnecessary mistakes which will bring debts. Managing records reduces cost by avoiding unnecessary duplications. University of Ghana http://ugspace.ug.edu.gh 33 There is a clear overlap between recordkeeping and records management, resulting in the two being often used interchangeably. The two terms will be used interchangeably in this study. .8.1 Managing records: record creation to disposition Records management involves managing records from creation to disposal, or transfer to the archives. Important elements of records management include records creation and use, records inventory, records appraisal, and records retention and disposition. 2.8.1.1 Records creation and use Organizational activities automatically lead to the generation of records. The creation of records is one of the stages in the life cycle of records (State Records Management Centre, 2004). It is the process of gathering records and integrating them into a record-keeping system. Effective record-keeping necessitates the following: the existence of a sufficient system to record the activities of each business unit; keeping accurate and thorough records of every business action in order to simplify any audit of the company's operations and guarantee the preservation of its employees' legal rights; and records that are arranged in a way that makes it possible for the authority to quickly and easily retrieve the information it needs (Kemoni, 2007). Making decisions about methods to log and manage records, as well as procedures for registering, categorizing, and indexing, are all necessary steps in the process of creating and capturing records (Yusof and Chell, 1999). 2.8.1.2 Records inventory A records inventory is a thorough examination of the contents of a company's files. To carry out this survey information about those records is described, quantified, and recorded on a University of Ghana http://ugspace.ug.edu.gh 34 standard records inventory form, in order to analyse the documents for retention, protection, and other purposes (Ndenje-Sichalwe, 2010). The organization's capacity to manage its records effectively is mostly determined by its knowledge of the types of facilities and equipment, filing and retrieval systems, growth rate, who manages the records, what records are there and in what amount. A records inventory can be used to gather all of this information. The crucial role that records inventory plays in a records management programme includes identifying and quantifying all records produced, referred to, or processed by the company (Ndenje-Sichalwe, 2010). Surveys frequently reveal a variety of problems in companies without a structured records management programme in place, according to Shepherd and Yeo (2003). These include paper records systems that are clogged and occasionally used to store data on products and other materials that are not records, paper documents that are disorganized and hard to find and whose organization does not accurately reflect the processes and actions that led to their creation, and records collections where material is found to be missing from paper systems but is electronically preserved on personal computers. 2.8.1.3 Records appraisal The next step after inventory is to conduct a records appraisal. A records appraisal is the process of assessing company activities to establish which records must be kept and for how long to keep them so that business demands, organizational accountability standards, and community expectations can be met (William, 2006). The aspects that appraisal aims to include are analysis of the organizational objectives and activities, determination of the records to be created and captured, and decision on the length of records' preservation to satisfy both internal and external needs (Man, 2005). University of Ghana http://ugspace.ug.edu.gh 35 2.8.1.4 Records retention and disposition A records retention schedule is a list of records that have been assigned specified destruction dates. Such schedules are referred to as records schedules, disposition schedules, and even retention and disposition schedules. (Penn, Pennix and Coulson, 1994). The length of time that business records must be kept is specified in a records retention programme. The idea behind the retention programmme is that information has a life cycle. Records should be able to be retained and disposed of at any time during their existence, even during the design stage of records systems. Advantages of using retention schedules include the following: • enhance efficiency by concentrating managerial attention on the most critical records for the company; • reduce office space requirements by eliminating records that are no longer needed or are no longer in current use; • reduce the number of records that must be searched for information, and thereby saving time; • preserve records which have enduring value; and • to anticipate the length of time that the records' producers and users will likely need them (Commission of Public Records, 2006). An organization needs a programme that allows for the elimination of unnecessary information if it wants to keep the growth of its records to a minimum. The records retention programme is an organization's official policy for information retention and destruction. Without it, records may be kept over unduly long periods of time or disposed of hastily without consideration for their value (Ndenje-Sichalwe, 2010). University of Ghana http://ugspace.ug.edu.gh 36 2.8.2 Records Records and the information they contain are among the vital resources of an organization. Just as no organization can operate without human and financial resources, no organization can successfully carry out its activities without records. The Association of Records Managers and Administrators (ARMA) defines a record as “recorded information regardless of medium or characteristics. Any paper, book, microfilm, card, magnetic tape, disk, map, or any copy or printout that has been created, or received by an organization and has been used by that organization or its successors as evidence of its activities or because of the information contained”. Records document all forms of transactions, that is, they are evidence of the activities of an organization and are also sources of information. They are used to manage institutions and organizations. The definition of the International Council of Archives (ICA) brings out the three qualities that make a document a record. They define a record as “recorded information produced or received in the initiation, conduct or completion of an institutional or individual activity and that comprises content, context, and structure, sufficient to provide evidence of the activity regardless of the form”. Erlandsson (1996, in Phiri, 2016), suggests that the three qualities: content, context, and structure, should be captured and preserved in order to make any document a record. Content is the information that a record contains. Context is about how the record relates to other records and the organization that created it. Structure is how the information is laid out. University of Ghana http://ugspace.ug.edu.gh 37 A universal definition given by the ISO 15489-1- 2016 (Clause 3.14) is “information created, received, and maintained as evidence and as an asset by an organization or person, in pursuit of legal obligations or in the transaction of business”. The ISO 15489 identifies the characteristics of a record, which an organization must maintain through proper records management systems, as authenticity, reliability, integrity, and useability. Based on these definitions a record is defined, for the purpose of this study, as any type of recorded information that has been created, received, kept, and used by a person or an organization to carry out legal duties, conduct business, or otherwise serve as evidence . 2.8.2.1 Financial records to be kept by SMEs. As stated earlier, the Decision Usefulness theory demands that businesses record their transactions and keep business records in order to be able to provide accurate financial information when needed. There are various factors that influence financial recordkeeping, which include the type or nature of business, type of information required and volume of activities (Adu, 2016). According to Sarapainavich and Kotey (2016) beginning SMEs should keep few accounts since the businesses are small and only have few transactions. They suggest that the first two of the following records can be kept by new SMEs and that those that have been in business for long should add the others. 2.8.2.1.1 Purchase account The purchase book keeps track of every transaction involving the purchase of products and resources. It includes details such as the date of purchase, purchase order number, stock number of the purchased items, and whether the things were paid for with cash or credit. University of Ghana http://ugspace.ug.edu.gh 38 2.8.2.1.2 Sales account The sales books keep track of all transactions involving the sale of goods and services, including the date of the sale, the invoice number, the total amount, the name of the customer, and the kind of transaction, such as cash or credit. 2.8.2.1.3 Creditor’s account/Accounts payable The accounts payable ledger is to keep track of amount owed to creditors and suppliers. This makes the managers know any point in time accounts payable and when these are due so that money can be used wisely. Paying debts at the right time makes businesses have a good credit standing with creditors and suppliers. Businesses should keep track of the following accounts payable data: invoice date, invoice number, invoice amount, terms, date paid, amount paid, balance (if applicable), and clients’ name and address. 2.8.2.1.4 Debtors account The accounts receivable ledger is used to monitor the level of receivables for each customer. The accounts receivable tracking system is not required if goods and services are paid for at delivery. It is used to track what is owed when goods and services are provided for which payment is to be made at a later date. It is possible to keep track of accounts receivable by retaining copies of all invoices that have been sent out or by maintaining accounts receivable University of Ghana http://ugspace.ug.edu.gh 39 records. In either case, the following details are required: invoice date, invoice number, invoice amount, terms, date paid, amount paid, and the name of the entity being billed. 2.8.2.1.5 Cash account All of the business's receipts and payments are listed in this account. 2.8.2.1.6 Stock account Keeping of inventory records prevents pilferage and, among others, enables managers track buying trends. The inventory information that needs to be captured is: date purchased, stock number of items purchased, purchase price, date sold and sale price. 2.8.2.1.7 Financial statements A financial statement shows the activities of a business of an individual. Information from financial statements helps creditors and financial institutions to decide whether or not to lend money or invest in a business. 2.9 Types of records created and kept by SMEs. Businesses generate various types of records in the course of their transactions. These records have to be maintained, because they contain information that is needed to run the businesses. To a large extent, the success of businesses depends on creating and maintaining an effective record keeping system, whether the business is a sole proprietorship, partnership, or a corporation. Not all types of records are kept by all businesses. Even though SMEs, like large University of Ghana http://ugspace.ug.edu.gh 40 businesses, are supposed to keep good records, their owners or managers should know which types of records to retain and for how long. Company records are classified by records managers in a variety of ways. One of the most common methods is to categorize records according to their worth or value inside the company. This value may be either primary (related to the main purpose for their creation) or secondary (not related to the immediate purpose for their creation). An organization’s legal, administrative, and fiscal functions are supported by records of primary value. Secondary-value records are used for evidentiary, informative, or historical purposes (Webster, Hare, and McLeod, 1999). Webster, Hare, and McLeod (1999) conducted a study in East England on the management of SMEs records. The study adopted a survey design. Systematic sampling method was used to select a sample of 300 enterprises from the North East Chamber of Commerce database. Questionnaires were sent to the selected enterprises by mail. The response rate was only 28%. One of the objectives of the study was to find out the type of records created and retained by the SMEs. It was found out that the most popular record type that was created and kept by all the respondent enterprises (62) was invoices. This was followed by correspondence (93.5%) and customer details (87. 1%). Besides invoices, there was no other record that was kept by all the 62 enterprises. Other records produced and maintained by the respondent enterprises were personnel/staff information, sales figures, tenders/quotes, purchase orders, minutes of meetings, reports, policies, technical publications, internal memos, visit reports, engineering drawings, and production reports. Others were quality assurance documentation, University of Ghana http://ugspace.ug.edu.gh 41 system/programming documentation, in-house training materials, production/process data, test certificates, vehicle documents, and software specifications. Macias-Jimenez, Acosta-Fontalvo, and Jimenez-Barros (2020) investigated the records management practices of SMEs in the road freight transport sector in Colombia, South America. The study was carried out using the survey approach, with a sample of 27 SMEs. Questionnaires were used to gather data. Among the objectives of the study was to find out the types of records the SMEs created and maintained. It was found out that besides legal and financial records, the Ministry of Transport of Colombia has made keeping of some operational records obligatory for companies in the transport sector, and these were kept by the SMEs studied. These documents were: ▪ Cargo manifest: This is a document which protects the transport of good and which is issued by the transport company authorized to provide cargo services. ▪ Consignment: It is a document which shows the specifications established in the Colombian Commerce Code, and the general conditions of the transportation contract. ▪ Remission: A document used to support the transport of merchandise between two or more geographical points. ▪ Invoice: It is a document used to report the sale of goods and services. ▪ Emergency card: A document that includes information about dangerous materials and manufacturer’s data, identifying hazards, personal protection, and exposure controls. ▪ National freight transport register: It is a form issued by the Territorial Direction of Ministry of Transport to allow the movement of goods on road. The document that was used most by the SMEs sampled was Cargo manifest (100%), followed by Consignment (96.3%), remission (85.19%) and Invoice (81.48%). University of Ghana http://ugspace.ug.edu.gh 42 Unlike SMEs in the developed countries, most SMEs in Africa do not attach much importance or pay much attention to record keeping. They seem not to know the role records play in business. In Africa, many findings have indicated that most SMEs do not keep records of their transactions. Those that keep records usually do not keep all required records. Ademola et al (2012) conducted a study in Koji State, Nigeria on the role recordkeeping plays in the survival and growth of small businesses in Ijumu Local Government Area of Koji State. The objective included examining the objectives of record keeping by an organization, the records to be kept by small scale enterprises, and the role of record keeping in the growth and survival of small scale enterprise. Managers of the studied enterprises were asked whether they kept proper records. 20 of the 150 respondents, representing 13% said Yes, 130, representing 87% said No. asked why they did not keep proper records, 90 respondents representing 69% said they did not know how to keep proper records, 18, representing 14% said it was time- consuming, 12 representing 9% said they kept things in their head, and 10, representing 8% said they owned the business and did not need to keep any records. This shows how record keeping is neglected by most SMEs in Africa, even though the decision usefulness theory states that business transactions should be recorded and maintained so that useful financial information can be provided when needed. A study by Abdul-Rahaman and Adejare (2014), unlike that of Ademola et al (2012), revealed that majority of respondents, 68 (51.1%) out of 113 kept records of their transactions. Their study on analysing the impact of accounting records on SME performance was conducted in Oyo State, Nigeria. Records on sales, purchases, creditors and debtors, receipts, invoices, and University of Ghana http://ugspace.ug.edu.gh 43 payment vouchers were kept. Respondents said these helped reduce operating cost, improve efficiency and productivity and helped in decision making. But the respondents said they did not prepare yearly financial statements. In a study in South Africa, Ajibade and Khayundi (2017) investigated the role records management plays in small, micro, and medium businesses (SMMEs) and how it helps to sustain a business. The study was conducted to find out the educational levels of the SMME managers, the records management skills/training the SMME managers possessed, the types of records that were created and maintained by the SMMEs, the records management practice adopted by the SMMEs, and the importance of records management to the SMMEs. The SMME managers were asked if they maintained business records. 39% said they did, but observation showed that they did not keep all records they had to keep. The respondents were asked to indicate the types of records they kept. Their responses showed that seven types of records were kept. These were invoices, customer details, general document, correspondence, personal information, purchase order, and sales figure. None of the SMMEs kept all of these. Meaning that the SMMEs encounter difficulties securing loans from financial institutions. This is because evidence of financial transactions is in invoices, purchase orders, and sales records, which are used to monitor market and price fluctuations, but the SMMEs hardly kept sales records. Sales figures are one of the most important factors for SMME performance monitoring and evaluation. Only 4.3% of the SMMEs studied maintained sales figures and purchase orders, which does not show that the SMMEs were maintaining good records management practices. To ensure accountability, every business needs at least invoices, purchase orders, and sales records. These are vital records and are required by financial institutions for business appraisal. University of Ghana http://ugspace.ug.edu.gh 44 They are required for sales predictions, market forecast, and inventory control. Inability to provide financial or sales records could be one of the reasons why banks often refuse to grant loans to small business in South Africa, as reported by Van der Vart and Fatoki (2011). They reported that about 75% of small scale businesses’ applications for loans are rejected. According to Ajibade and Khayundi (2017) the inability of the SMME managers to use records management for inventory control and business forecasting could be responsible for the sudden closure of most SMMEs in South Africa. Due to this abrupt shutdown, South Africa now has one of the highest rates of SME failure worldwide (Bauer, 2012). In Kenya Waari, Angaine, Kamaku, and Mathenge (2016) undertook a study to examine the state of record keeping by SMEs. A descriptive research design was used with a sample size of 141 SMEs selected using probability sampling. Descriptive statistics was used to analyse data. Findings included the types of records created and maintained by the studied enterprises. Legal documents, insurance documents, permits and licences, loans, and administrative documents like minutes of meetings, employment and personnel records were not mentioned. Records found to be kept by 97% of the SMEs were cash register (kept by 34.7% of the 141 SMEs), invoices (10%), and receipt books (more than 50%). Other records were debtors’ ledger (28.1%), cash book (47.1%), petty cash (6.6%), credit ledger (3.3%), and general ledger (9.9%). In Ghana Amoako (2013) conducted a study in the Kumasi Metropolis on recordkeeping practices of SMEs. The findings showed that majority of the SMEs did not keep records. Most owners run their businesses and hence do not see the need to keep records, since they do not account to anybody. Asked whether they kept records, 74 (35.24%) out of the 210 respondents University of Ghana http://ugspace.ug.edu.gh 45 said “yes”. The rest did not. Observation showed that those who said yes did not properly keep their records. Those who did not keep records of their business transactions were asked to indicate if they kept some forms of records. 109 (80.15%) of the 136 respondents said they kept some notes which reminded them of their debtors. The remaining 27 (15.85%) did not keep any form of records at all of their businesses. The 35.24% who kept records were asked the types of records they kept. They mentioned cash book, general ledger, receivables ledger, payables ledger, statement of financial position, income statement, and cash flow statement. Dawudu and Azeko (2015) conducted a study in the Bolgatanga Municipality to assess the record keeping behaviour of small scale businesses. The findings were consistent with those of other works in Ghana and other parts of Africa. Like Ajibade and Khayundi (2017) in South Africa, Dawudu and Azeko (2015) wanted to find out whether the small scale business owners in the Bolgatanga municipality were aware of the importance and contribution of records to business success and if, as a result, they kept proper records of their business transactions. 30 (25%) of the120 businesses kept records. The remaining 90 (75%) did not keep business records. Unlike Ajibade and Khayundi (2017) who, from the findings of their study, opined that education has no influence on business people’s decision to keep records, Dawudu and Azeko (2015) mentioned lack of education as the cause of the majority of the respondents’ failure to keep records. Majority (55%) of the respondents had no formal education. The researchers next wanted to know the types of records kept by those who kept records and if these were in line with International Accounting Standards Board’s (IASB) requirements for SMEs. Observation revealed that the small scale business operators kept improper records like note books, papers, and writing on walls. They also observed that only a few kept proper University of Ghana http://ugspace.ug.edu.gh 46 records such as cash books, sales day books, petty cash, purchase day books, income statements, and statements of financial position. The few who kept records, according to the researchers, did not meet IASB requirements for SMEs. They ignored “statement of cash flows, statement of changes in equity, and statement of income”. Yusif, Kusi, and Ismail (2019) carried out a study in the Wa Municipality of Ghana on records and information management among SMEs. The main objective of the study was to describe the record keeping practices of SMEs in the Municipality. To do this, the study examined whether the SMEs kept records or not, the types of records kept, whether the records conformed to international standards, and how accessible the records were. Concerning whether the SMEs kept records or not, responses showed that 72% of the SMEs kept one form of record or the other. 28% of the respondents said they did not bother to keep business records. This situation was almost a direct opposite of that of Bolgatanga Municipality where Dawudu and Azeko (2015) found out that 75% of small businesses did not keep records and 25% keeping some forms of records. Having established that most of the SMEs in the Wa municipality did keep some forms of records, the researchers then wanted to know the types of records maintained by the SMEs. According to them, the SMEs kept Financial, Inventory, Personal, and Administrative records. Financial records included sales day book, purchase day book, cash receipt book, cheque payments book, petty cash book, general journal, nominal ledger, and debtors’ ledger. Other forms of records, which the researchers called Personal records, were also kept, which include registers and log books. Inventory records were also kept to monitor products in stock and out University of Ghana http://ugspace.ug.edu.gh 47 of stock. They also mentioned Administrative records kept by the SMEs. An example is attendance book. However, none of the SMEs kept all these records. In a study carried out in the Tamale metropolis Musah and Ibrahim (2014), among other objectives, wanted to know whether the SMEs kept records. They found out that 65% of the respondents kept some records, but none kept all required records. 37% of the 65% kept sales ledger, 23% kept accounts of income and expenditure. About 29% kept cash book, 4% kept purchases ledger, and 7% kept general ledger. 2.10 Records management training and competence of managers of SMEs. SMEs, as business entities, must be able to properly create and keep records as evidence of their business transactions. They have to be able to properly manage their records. This makes requisite information readily available for decision making and other business transactions, because business information is in business records. To be able to properly manage business records, managers and staff of SMEs who are in charge of record keeping have to have training and competencies or skills in record keeping. The ISO 15489-1-2016 states that “People with assigned responsibilities relating to the creation, capture, and management of records should be competent to perform these tasks”. SMEs in developed countries mostly have the skills and ability to properly and efficiently maintain their business records. According to reports in the EU, the improvement in the SMMEs' operations was due to their capacity to keep records. It made records accessible with University of Ghana http://ugspace.ug.edu.gh 48 ease, which improved service delivery (Webster et al, 1999). For administrative, operational, and legal compliance reasons, they keep records (Webster et al, 1999; Borglund, Anderson, Sirkemaa, Wahlberg, and Sandberg, 2009). Keeping records for administrative, operational, and legal purposes means that they keep all records that have to do with their business transactions. Unlike SMEs in developed countries, most SMEs in Africa lack training and competence in record keeping. Several studies in Africa have revealed varied degrees of knowledge and professional competence deficiencies in records management (RM). These issues arise when unqualified individuals are hired to manage records without any training in the public, corporate, and majority of company businesses (Khayundi, 2011). According to Kemoni (2000), poor recordkeeping can lead to issues including low or lost productivity, a lack of direction for the company, lower efficiency, and tilted profitability. Tushabomwe-Kazooba conducted a study in Uganda on the causes of the failure of SMMEs. The study revealed that majority of SMMEs failed to comply with records management principles as a result of lack of training and competence in records management (Tushabomwe- Kazooba, 2006). Asked what were the causes of the failure of small businesses in Uganda, 44 (33%) out of the 134 respondents mentioned poor record keeping. The majority of nations in the Eastern and Southern Africa Regional Branch of the International Council on Archives (ESARBICA) region lack the capacity for efficient records management, according to a study by Kemoni (2009). Records management was said to be hampered by a lack of infrastructure and recordkeeping staff with inadequate training and awareness capacities. A statement made by one of the respondents of a study carried out in Uganda by Okello-Obura (2012) on records University of Ghana http://ugspace.ug.edu.gh 49 management practices among SMEs in the Tororo district confirms that most SME managers, some of whom may be educated, do not have skills in managing records. He said “[…] we have experience, education but lack skills in managing records and information which is key to decision making…” Respondents of the study conducted by Admola et al (2012) in Nigeria were asked whether they kept records of their business transactions. 90 out of the 150 respondents representing 60%, said they did not know how to keep records. Not knowing how to keep records shows that the respondents did not have training in records keeping, and hence lacked the skills in keeping records. 85% of them said it was necessary for them to have training in record keeping. In Tanzania Ghasia, Wamukoya, and Otike, (2017) carried out a study on how records are managed in small and medium businesses at Vigaeni Ward Mtwara-Mikindani Municipality. One of the objective was about the competence of the SMEs in record keeping. The sample of the study was 80 SMEs. The owners/managers were asked whether their employees had knowledge and skills in record keeping. 11% said No, 9% said they gave their employees instructions on how to keep records, five percent said their employees learnt from experience. These responses revealed that the SMEs lacked knowledge and skills