Financial Management Practices and Profitability of Rice Milling Firms in Niger State

Rice milling is a critical agro-processing link in Nigeria's rice value chain, and in Niger State, located in the North Central geopolitical zone, numerous small and medium rice milling firms operate as key actors between paddy farmers and consumer markets. The financial management practices of these firms directly influence their operational continuity, investment capacity, and profitability. This study examines the financial management practices of rice milling firms in Niger State and evaluates their effect on enterprise profitability. A sample of 50 rice milling firms was selected using purposive sampling from three major paddy-producing local government areas. Data on accounting systems, cash flow management, inventory control, credit management, and capital investment practices were collected through structured interviews and review of firm financial documents where available. Profitability was assessed using gross profit margin and return on assets ratios. Descriptive statistics and multiple regression analysis were applied. Findings reveal that firms maintaining systematic cash flow records had profit margins 18 percentage points higher than those relying on informal cash management. Inventory management was the weakest financial management area, with 64 percent of firms lacking structured approaches to paddy input tracking. Access to working capital from commercial banks was reported by only 20 percent of firms. The study concludes that financial management capacity is a binding constraint on rice milling profitability in Niger State and recommends that mill operators engage with certified accountants and adopt digital bookkeeping tools suitable for small agro-processing enterprises. Keywords: financial management, rice milling, profitability, Niger State, agro-processing