The Influence of MFI Finance Services on Profitability of Agriculture SMEs in Mbeya City.

Mwang’anda, Ajile (2024) The Influence of MFI Finance Services on Profitability of Agriculture SMEs in Mbeya City. Masters thesis, The Open University of Tanzania.

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Abstract

This study focused on assessing the influence of MFIs' financial services on the profitability of SMEs dealing with Agribusiness and agriculture in Mbeya City and their financial and non-financial services on the profitability of Agriculture SMEs in Mbeya City. The study examined whether MFIs' financial services, such as microcredit, insurance, saving, and training, influence the profitability of SMEs in the Agriculture sector. The research sample was selected through simple random sampling, and cross-sectional data was collected through survey questionnaires distributed to 184 respondents; however, 151 questionnaires were correctly filled. Study analysis was done through descriptive and inferential statistics using a multiple linear regression model. The study discovered that microcredit, insurance, saving, and training services positively and significantly influenced the performance of Agriculture SMEs in Mbeya City. This study significantly contributes to the literature on the relationship between microfinance institution (MFI) products and the growth of agriculture SMEs. Government policies enabling agribusinesses to access funds under favorable conditions and rates are crucial for fostering business growth. Moreover, this study solidifies the theory of financial intermediation by highlighting the pivotal role of MFIs in providing services that contribute to the performance, profitability, and growth of agriculture SMEs. Consequently, this aids in expanding the agricultural sector, benefiting the national economy. Keywords: MFIs financial services, Profitability, Agriculture SMEs, Mbeya City

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