Financial challenges faced by small and medium sized enterprises (SMEs) in Lushoto district

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Date
2009
Journal Title
Journal ISSN
Volume Title
Publisher
University of Dar es Salaam
Abstract
Small and Medium Sized Enterprises (SMEs) in Tanzania gives a much contribution towards building the national economic base. They create employment to the poor, contribute to the national income through paying taxes, provide raw materials to large firms, and act as the distribution outlets of large firms’ products. Despite their major contribution to the national development, they fail to grow because they are constrained with several challenges whereby the financial crisis is the major one. They do not get much financial support from the government and financial institutions to support their businesses. In research study conducted in Lushoto district, thirty (30) SMEs were studied using the random sampling method to view what makes them perform poor regardless of their importance to the national development. The major issues identified in the study constraining the performance pf SMEs involved, among others, insufficient amount of capital to run the businesses, unsupportive loan conditions imposed by financial institutions that limits SMEs the access to financial resources, unavailability of business support services for running of businesses to enhance their growth, lack of business culture for many promising entrepreneurs, and, unsupportive government policies and regulations. Nevertheless there is a great deal that the government and other stakeholders can do to enhance the growth of SMEs including; adopting legal and regulatory frameworks that allow best use of financial sector infrastructure, maintaining prudential supervision of the financial sector, maintaining business support services to SMEs, and encouraging banks to implement good corporate governance practices and transparent non-bureaucratic procedures.
Description
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class Mark (THS EAF HG4027.7.K66)
Keywords
Small business, Lushoto district
Citation
Konyagi, Z (2009) Financial challenges faced by small and medium sized enterprises (SMEs) in Lushoto district, Master dissertation, University of Dar es Salaam