Browsing by Author "Kazinja, Charityna K."

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    Problems of industrial financing in Tanzania: the case of financial institutions
    (University of Dar es Salaam, 1986) Kazinja, Charityna K.
    Much has been said and written on the aspect of paucity of sources of industrial finance in both micro and macro senses. However, little has been said and done on the problems of industrial financing in Tanzania. The purpose of this study is to examine factors leading to the fluctuations in funds extended to the industrial sector. The basic hypotheses are that demand or investment finance is positively related to the level of economic activity and the level of investment while it is negatively related to both internal and external sources of funds. Then demand for working capital finance is positively related to employment level and the level of economic activity but negatively related to interest rates while it is inconclusive in the case of economic shocks. Lastly, lending procedures were hypothesized to be negatively related to lending activities. These hypotheses were tested for Tanzania for the period 1970-1984 using the multiple regression technique. The estimated model validates our hypotheses except for the interest rate variable which positively relates to the demand for working capital finance as opposed to a priori hypothesized negative sign. The study recommends that internal and external sources of finance should be raised in order to enhance industrial development. Also financial institution mobilizing external sources of funds should liaise their foreign exchange requirements to the central bank and collaborate in searching for donors. Then arm-chair banking should be avoided and efforts made search for borrowers. The study also underscores the importance of finance to industrial development.