Factors influencing performance of micro and small enterprises in Tanzania: the case of selected manufacturing MSEs in Dar es Salaam

The aim of the study was to examine the factors which influence the performance of micro and small enterprises based on the manufacturing sectors in Tanzania. Specifically the study examined legislation and government policy, social cultural background of entrepreneurs and availability of resources on the performance of business. The study was conducted at Ilala, Temeke, and Kinondoni Municipals. The sample for the study was to respondents. A random sampling was adopted while self administered questionnaires, structured interviews and the observation guide were employed to obtain the primary data. Secondary data were obtained from different documents and analyzed using descriptive statistics method. The study findings revealed that government policies and legislation, availability of resources as well as social-cultural issues are factors affecting MSE’s performance. With regard to government policy and legislation found out that they affect the business performance as most legislation procedures have cumbersome procedures, bureaucracy and corruption. Also the study found out that government policy also does not identify clearly the intervention required to MSE’s sector, if it does, no strategies have been stipulated to implement. The study found out that resources such as infrastructure and finance are important factor for business performance, but most MSE’s in the sector are found to be constrained. It was further revealed that social and cultural norms such as attitude, life style, and family structure were some of the factors which affecting MSE’s business performance. The study recommended that as most of the social cultural factors, legislation and policy as well as resources have been found as among factors affecting MSE’s in Tanzania hence MSE’s performance should be enhanced by provision of education to both men and women involved in the business in order to equip the sector with relevant knowledge and skills to overcome not only different challenges but also obstacles affecting their business. Also policy makers and government should promote the MSE’s particularly based on the manufacturing sectors and reviewing the MSE policy. Furthermore, it is recommended that MSE’s should form strong union, professional advices, should operate in economic group such as VIBINDO as all these will increase their performance especially in manufacturing sectors.