Assessment on the effectiveness of business development services offered by government agencies on SMEs’ performance in Tanzania: a case of small industries development organization

The general objective of this study was to investigate the effectiveness of Business Development Services delivered by government institution in relation to SMEs performance in Tanzania. The study was triggered by the thinking that apart from government enacting a number of policies and strategies in support of SMEs, the growth and performance of the sector is still questionable. In order to accomplish the study objectives, data were collected from SMEs who happen to get services in one way or another from Small Industries Development Organisation which was taken as the case study. The Study covered the regions of Dar es Salaam, Iringa, Ruvuma, Pwani and Kilimanjaro who was considered as the representative of the entire SMEs assisted by SIDO in Tanzania. The data collected was then analyzed quantitatively by Excel computer soft ware, based on frequency and percentage. Tables were used to present findings of the research. The findings of the study revealed that services offered by Government agencies supporting SMEs, SIDO in particular significantly contribute to SMEs performance. With regards to technical service offered, the findings indicated that, majority of SMEs are aware of different technologies offered by SIDO, though price and quality of the technology have been the hindrance factors for some of them to adopt it. Most of respondents indicated to have business registration and few having product certification from relevant authorities. Few respondents were found operating within SIDO industrial estate and majority contented that, the rental charges are reasonable. On the aspect of training offered, majority of SMEs were positive particularly on the issues related to the training method used, ability and knowledge of trainers as well as the impact of training on their ability to do formal business and financial management. Although the area of preparing business plan, product development and innovation was seen to be challenging to most of the respondents despite of attending training. However financial services were also found to be very important to majority of respondents particular those who had loan from SIDO. SMEs challenged the amount of loan offered to be very small hence limiting their ability to invest on advanced technology and increase production. On the other hand marketing services were also found to be very important to most of the respondents although respondents urged that SIDO should strengthen it. Otherwise other parameters of marketing assessed were ranked very low, such as SMEs which are linked with large markets and those which are able to conduct e-business and export their products.