Impact of Microcredit on Productivity Among Tanzanian Entrepreneurs, A Case of Kibaha Town Council.

Masebe, Norbert Faustus (2022) Impact of Microcredit on Productivity Among Tanzanian Entrepreneurs, A Case of Kibaha Town Council. Masters thesis, The Open University of Tanzania.

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Abstract

The general objective of this study was to determine the effect of microcredit on Tanzanian small business production, A case of Kibaha Town Council. The study was guided by the following research objectives: To explore issues affecting access to finance and their impact on productivity among Tanzanian entrepreneurs in Kibaha Town Council, to find out how lending policies for small micro-credit institutions affect the productivity among Tanzanian entrepreneurs in Kibaha Town Council and to determine how the impact of capacity building of micro-credit institutions affects productivity among Tanzanian entrepreneurs in Kibaha Town Council. A descriptive research design was used because it helps the researcher find out the what, who, where, when or how much. Target population used 661 entrepreneurs’ operating in Kibaha Town Council. Clustered random sampling was used and a quota of 30% which was drawn from each stratum thus, giving us a sample size of 300 respondents. Questionnaires were used to collect data. Data was analyzed using descriptive statistics. Pearson correlation and regression analysis was used to determine the influence of independent variables on the dependent variable. The findings on factors affecting access to finance and its effect on performance of entrepreneurs revealed that majority of respondents agreed that they started their business using their savings and they usually disclose information regarding their business when applying for a loan. The findings on how lending policies of micro financial institution affects performance of entrepreneurs showed that respondents agreed that due to lack of collateral respondents get loans from other sources. The findings on effect of capacity building of micro financial institution affects performance of entrepreneurs. Respondents agreed that trainings helped them grow their business and sales. Through networking respondents were able to share knowledge and learn new skills. The study concluded that a lot of entrepreneurs started their business using their savings and they also disclose information regarding their business when applying for a loan. Training has helped entrepreneurs grow their business and sales and it has also helped them understand terms and conditions required before applying for a loan.

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