Factors Influencing Development of Small and Medium Enterprises (SMEs) in Tanzania: A Case Study of Hardware and Building Materials (SMEs) in Ilala Municipal Council in Dar es Salaam Region

Mukasa,, Samson Kasozi (2016) Factors Influencing Development of Small and Medium Enterprises (SMEs) in Tanzania: A Case Study of Hardware and Building Materials (SMEs) in Ilala Municipal Council in Dar es Salaam Region. Masters thesis, The Open University of Tanzania.

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Abstract

The study examined the factors influencing development of SME's, with reference to hardware and building material enterprises in Ilala Municipal Council. The study was guided by three objectives; namely to assess the levels of Human Resources capacity in relation to business management and entrepreneurial skills, to establish the nature of enabling environment to SMEs development and to determine the existing levels of SMEs development in the study area. The study adopted a case study in its investigation as a research strategy, whereby three sampling techniques were employed to obtain representative samples of respondents these were; simple random, stratified, and purposive sampling. Data were collected through questionnaires, interview, observation and documentary review. The study revealed that majority of individuals who run SMEs are sole owners of the enterprises and does the roles of owner mangers, who entered in business with different motives such as retrenchment, retirement and none of them claimed to be pushed by the identified market opportunities. Lack of knowledge in business management and poor accounting and auditing were the topmost obstacles for SMEs development. The findings further revealed that, complex tax system, bribery to access public services as well as lack of legitimate laws and regulations to promote the growth of SMEs. Furthermore, it was revealed access to credits and microloans were hindrances for SMEs development. In Concluding, the study revealed that most of SMEs are experiencing minimal or no growth despite their crucial potentiality to create employment and poverty reduction. The study recommends that government should pioneer the efforts of offering training programs in entrepreneurship. MFIs should facilitate these SMEs to have access on credits and microloans.

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