Factors that hinder small and medium enterprise customers to access credit from commercial banks in Tanzania: the case of CRDB Bank PLC

The main object of this research was to investigate whether or not there are factors that hinder SMEs’ access to credit from commercial banks in Tanzania. CRDB Bank PLC was taken as the case study of the research. In addition, the study assessed contributions from commercial banks in Tanzania focusing on provision of funds (credit) to SMEs’ performance and growth. Bank credit provides different opportunities on funds when raising short and long term capital from formal and informal financial markets. Credit provides the basis for increased SMEs’ production through efficiency specialization of business and functions. The measure brings together skilled managers with small financial resources and those who have substantial resources but who lack management ability. Data collection was done through questionnaires, interviews and documentary review. Research findings revealed that there are factors that hinder SMEs to access credit from commercial banks in Tanzania. Factors include lack of collateral, bank policy as well as bank procedures on SMEs’ poor business management and SMEs’ small business size.