Michael, Isaack
(2008)
Consumption and saving pattern of micro small and medium enterprises operators: A case of Ubungo bus terminal in Dar es Salaam.
Masters thesis, The Open University of Tanzania.
Abstract
This study examines consumption and saving pattern of Micro, Small and Medium
Enterprises (MSMEs). The study objectives are to assess the proportion of
consumption and the proportion of saving of MSMEs operators; relationship between
socio-economic characteristics, saving and consumption patterns of MSMEs and
identifying MSMEs major constraints in order to evaluate the capacity of MS.MEs to
eradicate poverty by increasing the proportion of their income invested which is key
if they are to grow and be sustainable. The study uses questionnaire survey
methodology to collect primary data and uses a model of consumption in which
income determines consumption. The study employed the Ordinary Least Squares
(OLS) method to estimate the econometric model. The main empirical findings of the
study show that the proportion of consumption is high compared to the proportion of
saving. The study results show relatively positive relationship between income,
consumption, saving and size of enterprise. MSMEs social characteristics do not
relate to MSMEs consumption and saving patterns. The major MSMEs constraints
are lack of capital, lack of security and lack of premises to conduct business,
Vll
ABSTRACT
The study recommends a need for taking measures to ensure that MSMEs become
sustainable in Tanzania as they lack capacity to sustain their growth prospects. Some
of these measures include creation and nurturing of MSMEs entrepreneurship
trainin.g, improvement of financial systems, establishing well functioning marketing
systems for MSMEs to utilize both local and international opportunities and put in
place a suitable legal framework for MSMEs to flourish.
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