An assessment of microfinance credit contribution to the growth of women micro and small enterprises (MSES) in Dar es salaam

The main objective of the study was to assess the contribution of Microfinance Institutions (MFIs) to the growth of Women’s Micro and Small Businesses in Dar es Salaam. MFIs provide loans to small businesses as working capital. To this end a conceptual framework was tested through a survey of 40 women entrepreneurs from different areas of Dar es Salaam (Mbezi Luguruni, Mlalakuwa, Tegeta and Afrikasana). The said areas are served by Presidential Trust Fund (PTF), which is a micro finance institution (MFI) under consideration. Another objective was to assess the contribution of education and business experience to the growth of micro and small business. The results reveal the existence of positive relationship between loans offered by MFIs and small business growth among women operators of MSE’s. However, the relationship is not strong because the net effect of loans is not reflected in the business growth due to diversion of loan funds in other family problems. It has also been revealed that, the level of education is not significant for small business growth. The study reveals that STD VII and Ordinary level of Secondary education are the ideal levels of education for small businesses. Lastly, this study has revealed to achieve significant growth is a result of personal initiative, hardworking and creativity. This study shows that some drives towards seeking micro credit are family financial problems such as medical expenses, school fees, house rents and construction of houses. The tendency has resulted into diversion of loan funds, causing the net effect of loan funds to the growth of the business to be diluted resulting into the failure to achieve the desired growth. In order to rectify shortfalls in financing women entrepreneurs the following are the recommendations. Increase borrowing limit, MFIs should develop additional products of interest to highly educated women. More education to borrowers on proper loan utilization is required and loan repayment grace period should be determined by the nature of the project.