Impact of obstacles in financing SMES: a case study of Tanzania postal bank in Tanzania, Dar es Salaam Region

The main objective of this research was to investigate the impact of obstacles in financing SMEs in Tanzania, the case of TPB. Particular concern was to investigate on the impact of obstacles in Financing SMEs on the growth of SMEs in Tanzania. The study comprised of a total number of 150 of respondents and applied various instruments of data gathering such as questionnaires and documentary review. The findings of this study revealed that the financial institution helps to increase employment for women, male and youth by facilitating them with personal and business financial needs. Financial institutions helped in reducing poverty among the society at large. However, the financial institution management should also be challenged on the issue of the higher interest, and minimize difficulties in accessing credits for SMEs. It is recommended that financial institutions should be challenged on the obstacles they raised in financing SMES. Higher interest rates, registered collateral like land and long processing of loans were among critical obstacles sighted. In addition a good business relation should be created between SMEs and Financial institutions so that the environments increase satisfaction for SMEs. Credit officers should be given enough training on the effect of corruption on the working place and importance of SMEs market niche. SMEs should be provided with training on entrepreneurship and use of the loans to avoid bad repayment when advanced credit facility.