Mazula, Tilumanywa Beatus
(2018)
The Influence of Microfinance Loans Towards Accelerating Growth of Micro & Small Enterprises in Misungwi: A Case of Finca Tanzania, Mwanza Branch.
Masters thesis, The Open University of Tanzania.
Abstract
This study was done to examine the influence of microfinance loans towards accelerating growth of micro & small enterprises in Misungwi District based on the experience of SMES who are beneficiaries of FINCA Tanzania (Mwanza Branch). The study population consisted of FINCA loan beneficiaries and FINCA workers. Data were collected by using a questionnaires.A total of 119 respondents were sampled for interview. 100 micro-entrepreneurs were randomly sampled from among loan beneficiariesand 19 FINCA workers were conveniently sampled based on their availability on the day of visit. Statistical Package for Social Scientists (SPSS) program version 16 was used in data analysis using descriptive statistics. The results indicated that almost all SMES were highly challenged by high interest rates in running their businesses. The results further indicated that about 68% of the loan beneficiaries did not realize any changes in their business and over half of the SMES did not realize any contribution of FINCA in poverty reduction. On the other hand 57.9% were negative about the contribution of SMEs in business growth and improvement of their incomes. The results also indicated that 83.4% of the respondents were to a large and to a very large extent associating the interest rates with the failure of their SMES. It can thus be conclude that MFIs aim at maximizing their profit with little impact to the wellbeing of their customers, that is, SMEs. The problems bewildering the customers to getting loans being lack of reliable collateral, such as, house, unfavorable conditions, high interest rate as well as lack of a grace period for the takeoff of the business. Furthermore Lack of training to enhance the entrepreneurial skills of the loan beneficiaries prior getting loans is another contributing factor.
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