The impact of small medium enterprises failure on individual business owners and the economy in Tanzania (the case study of Temeke municipality- Tanzania)
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Date
2012-11
Authors
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Publisher
Kampala International University Uganda,College of Economics and Management
Abstract
The role of Small Business is recognized as one of the major contributors in the growth of the
country's economy like Tanzania and therefore, poverty alleviation. The SME sector also serves
as a 'nursery' and a proven training ground for 'higher level' entrepreneurship and iru10vation.
The objective of the study was the assessment of critical factors to small business failures in
Tanzania, the case of Temeke Municipal. Data was collected from respondents by means of
administering 60 (sixty) structured questioru1aire. Data analysis use both qualitative and
quantitative methods to analyze the data, model and hypothesis testing. The research found that
the causes of small business failure are multidimensional and diverse they include both internal
and external factors to the business which hinder its hasty growth and therefore reduce the
weight of its potential contribution to the national economy and inhibit the economic
empowerment of entrepreneurs. From the findings of the study, the most critical factors to small
business factors are access to finance, poor health, and access to technology, lack of management
skills, poor association, corruption, and property rights. Other factors were found to be
contributing to small failure though in lesser weight.
This research concluded that; small business funding p1imarily from non-loan sources. These
included personal savings, friends, relatives, SACCOs, and informal savings credit societies
known as mchezo wap upatu". It was also noted that banks shul111ed loaning small business
owners because of high risks.
The study recommended on the need for financial institutions to create the possibility of
extending guarantee anĀ·angements to include coverage for long-term loans. The needs for SME
database that stores all information about the sector and the needs for SMEs authority with the
the mandate to oversee all the activities of the sector and develop sustainable plans that will develop
the sector to a better future.
Description
A research report submitted to the College of Economics and Management in partial fulfillment for the requirements for the Award of a Bachelor's Degree in Business Administration of Kampala International University Uganda.
Keywords
enterprises, economy