Financing and keeping afloat small and medium enterprises: a case of selected Women Owned SMEs in Tanzania

The aim of this study was to determine the sources of financing among women owned SMEs in Tanzania. The main concerns were whether these sources will differ at the onset of the business and at a later stage of business life cycle. Yet the study sought to profile, based on their importance the sources of finance at the beginning and latter stages of the business. Finally, this study was to find out the relationship SMEs was conducted in Dar es Salaam. The data collected was analysed for cross tabulations, factor scores and descriptive analysis. Findings reveal that at the business onset the more obvious sources are VICOBA, SACCOS and family or relatives in that order of importance. These informal sources have fewer demands in terms of collaterals and records from the business and are to do with networking and relationships. In the later stage of their business and are to do with networking and relationship. In the later stage of their business SMEs keep their business afloat by sourcing from MFI, Banks, VICOBA and SACCOS in that order of importance. Therefore VICOBA and SACCOS play a big role as source of finance for SMEs at the beginning and later stage of the business lifecycle. Similarly findings have shown that certain sources of finance are associated with performance of the SMEs business. Such that the use of banks, MFI. Government subsidies and SACCOS are positive positively related with the performance of SMEs. Based on the findings the study concludes that although both SACCOS and VICOBA are important sources of finance, it is only SACCOS, banks, MFI and government subsidies that have had a positive influence on SMEs performance. While SMEs depends more on the informal sources. The informal sources that are more preferred are relational such as SACCOS and VICOBA as such membership in these groups could be what facilitates the access to the finances from these sources. Based on the findings it is recommended that, there is a need to strengthen and make more reliable the informal sources particularly the SACCOS. A need to set up mechanisms for a smooth lifecycle of SMEs among others.