Assessment of effects of debt covenants ' on accessibility to loans by small businesses in Tanzania

The main objective of this study was to assess effects of debt covenants on accessibility to loans by small businesses in Tanzania and also its impact on their growth. Debt covenants are said to have significant elects on accessibility to loans by small businesses in Tanzania. A total of 1 17 respondents from six National Microfinance Bank branches in Dar es Salaam and Coast regions were sampled. Both qualitative and quantitative methods were used in data analysis. SPSS program aided data analysis. Simple linear regression models were used to test relationships that the researcher was interested to find out. It was found that loan covenants had effects on accessibility to loans from NMB Ltd by small businesses. At 5% level of significance, the study showed that there is significant statistical relationship between NMB loan covenants and accessibility to loans, at the same level of significance, the researcher found significant statistical relationship between small business growth and access to loan facilities from the Bank. The study however, found other factors th.at delimit small businesses from accessing loans from banks and other financial institutions. It is recommended that banks should look for alternative soft covenants in their loan agreements to enable as many small businesses as possible to have access to loans. On die other hand small business owners are advised to be proactive and aggressive in adopting new ideas, technology and market knowledge