Financial management literacy of early childhood development centre managers in Mafikeng

Abstract

This study investigated the level of financial management literacy of Early Childhood Development (ECD) centre managers. According to Hutchinson, Sohl and Vlahos (2004) the running of a child care centre require "substantial business skills". In South Africa, privately-owned ECD centres fall under the classification of small businesses which play a significant role in the national economy by providing employment and contributing to the Gross Domestic Product (GDP). This study used a survey method consisting of a questionnaire and a structured interview. The population for the study was made up of all the managers or owner-managers of privately run ECD centres in Mafikeng. A sample of 14 ECD centre managers was randomly selected from the population. The research sought to find out the financial management challenges that ECD centres face as small business units, the current level of financial management literacy of ECD centre managers and the strategies by ECD owners to improve the level of financial management literacy of ECD centre managers. Key findings from the study are that ECD centres face many financial management challenges; the level of financial management literacy of ECD centre managers is generally low and there are very few or no strategies by ECD owners to improve the level of financial management literacy of ECD centre managers. Recommendations from the study are that ECD centre owners should invest in information technology and financial training to ease the burden of managing finance. The literature suggested that those who use computers do not struggle to maintain accounting records since most of the ECD centre managers do not have accounting knowledge.