SME characteristics and the utilization of international trade finance instruments in Tanzania: the case of SMEs in Dar es Salaam

The study was about assessing the SME characteristics and the utilization of International Trade Finance Instruments in Tanzania. The study identified extent to which the nature of SMEs business, SMEs business practices, SME’s managements practices and SME’s market orientation on effective utilization of Trade Finance Instruments . The descriptive study strategy was used to gather required data to answer the research questions. Questionnaires were used to collect data from different respondents. Findings exposed that the utilization of the international trade finance instruments is highly depending on Nature of SME, business practices, SME management’s practice and SME market orientations. According to the findings the nature of the business could be size of the business, ownership, type of the business and even formality of the business. The business practices that affect the utilization of TFI including location of the business, risk management practices, networking and even readiness of SMEs in utilization. Furthermore the findings concluded that awareness, acquaintance, innovativeness confidence and accessibility of TFI are also important in effective utilization of trade finance instruments. Lastly the study also finds performance of rival firms; supply chain, trade infrastructure and marketing practices affect this. Results from the study have implications to the SME management, the responsible establishments and business community in general to call on cultivating and enhancement of utilization of TFI. Therefore, it is recommended that the SME’s should improve its marketing orientation, nature of business, management’s practices and even its business practices. Also the findings are more important to the regulators as the results can be used to improve the policy governing ITF for SMEs developments The researcher at the end suggested the further research can be done on various industries and also to involve more banks in order to get other views on the subject matter.