Contributions of SACCOs on the Growth and Sustenance of Small Businesses in Tanzania: The case of Mbeya City

Mboka , Obadia T. (2014) Contributions of SACCOs on the Growth and Sustenance of Small Businesses in Tanzania: The case of Mbeya City. Masters thesis, The Open University of Tanzania.

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Abstract

Despite the initiatives taken by the government to improve the growth and sustenance of small businesses and tremendous growth of SACCOs in Mbeya City, small businesses have continued to suffer. The study investigated how SACCOs have contributed on the growth and sustenance of small businesses in Mbeya City. The main objective of this study was to analyze general contributions of SACCOs on the growth and sustenance of small businesses in Mbeya City. Specifically the study assessed challenges facing the growth and sustenance of small businesses and analyzed potentials of SACCOs in supporting the growth and sustenance of small businesses. The area of the study was in Mbeya City and the simple random sampling technique was employed. The sample size of 64 respondents was chosen among traders, Mbeya City Cooperative Officers and Loan Officers of Lulu and Upimaji SACCOs. Statistical Package for Social Science (SPSS) was used for data analysis. Study showed that the potentials of SACCOs on supporting the growth and sustenance of small businesses in Mbeya City is still low due to the higher rates of interest charged on loans advanced to members and poor training given on how members should improve significantly their businesses. Findings concluded that the contributions of SACCOs to promote the growth and sustenance of small businesses in Mbeya City is poor due to the combinations of challenges. Among these include; high interest rates charged on loan to members, absence of seminars and training to business proprietors. It was recommended that measures should be employed to make taxation system fair and also it was recommended that SACCOs loans provided to members should be of lower interest rates and SACCO’s management should prepare training to members on how to run their businesses.

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