Assessment the contribution of foreign direct investments to the growth of SMES in Tanzania

This study assessed the contribution of foreign direct investments to the growth of SMEs in Tanzania. Specifically, the purpose of the study was to identify the business and social relationships that existed between Chinese and local garage owners; to explore the linkages and supply chain relationship between Chinese and local garage owners. Also the study aimed at identifying major opportunities and challenges facing the local garage owners in their business relationship with Chinese garage investors. Lastly, the study aimed at finding out the perception on the degree of Chinese/Local garages business linkages. The study used open ended and closed ended questionnaires, interviews, Focus Group Discussions (FGDs) and reviewed documents from various libraries and online resources to collect secondary data. Data of this study was drawn from different garages comprising 68 respondents. Data analysis was done qualitatively and quantitatively using Software Package for Statistical Science (SPSS) version 16.0. The study findings revealed that most of the garages were registered; most of the graduates were Chinese and few Tanzania nationals but they only owned garages. Massive number of males work and own garage business, most of the garages are owned and managed by individuals or their family and most of them are local garages. Few of the garages have separated ownership and management. Furthermore, the study found that lack of openness in business dealings among the business owners, lack of qualified man power in mechanics; poor business environment and services among the locally owned garages are frequently mentioned to be the main challenges. Based on the study findings, it is recommended that encouraging women in garages business, business formalization, partnership, friendship, high interaction and using locally made car fixing materials to be among the solutions of improving SMEs growth would improve garage businesses in Tanzania.