Impact of social relationships and networks on growth of SMES in Tanzania

The future of Tanzania’s economic growth depends on private sector in which small and medium enterprises are major players. It has been argued that networking and social relationships among owner managers of SMEs is an important element in facilitating growth of SME sector. The main objective of this study was to find out the impact of social relationships and networking on growth of SMEs in Tanzania. This study employed a combination of cross-sectional survey and case study research designs to assess the impact of social relationships and networking on growth of SMEs. 70 owner managers of SMEs were interviewed from Dar es Salaam and Mwanza regions, and four case studies were developed. Findings from this study show that owner managers of SMEs use networking and social relationship as an important tool in facilitating growth of their enterprises. Networking and social relationships provide instrumental resources in terms of business information, finance, physical assets and moral support to owner managers of SMEs surveyed at different stages of their businesses development. In this regard it can be concluded that networking and social relationships enable SMEs to become more competitive and gain flexibility to cope with rapidly changing and intensely competitive business environment.