Tanzania’s private sector: constraints and challenges in accessing finances

This study focused on examining Constraints and Challenges in Accessing Finances by the private sector in Tanzania for the period of 23 years i.e. (1988–2010). Econometric analysis concentrating on regression and correlation analysis was carried out to find the relationships between different variables chosen by the researcher namely; Domestic credit to private sector as a percentage of GDP (Dctsect) as dependent variable, and Domestic credit provided by banking sector as a percentage of GDP (Dcbbsect), Liquid liabilities (Lliab), inflation (infl) , lending rate (Lr),and Regulatory quality (Requa) as independent variables. The empirical results indicate that access to credit in Tanzania, whether short, medium or long term credit, is constrained by many factors relating to limited domestic credit provided by banking sector , inflation, liquid liabilities, lending rates and regulatory quality though in varying rate. Tanzania would therefore gain most from financial development by continuing to maintain a stable macroeconomic environment, strengthening the legal protection for creditors, effectively applying the laws and follow recommendations of The Financial System Stability Assessment (IMF, 2008) such as improving the legal and judicial frameworks, and the quality of financial and accounting information to mention few.