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A Review of Factors Affecting the Growth of Small and Medium Enterprises (SMEs) in Tanzania

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Jesca Nkwabi at University of the West of Scotland
Jesca Nkwabi
Leodger B Mboya at University of the West of Scotland
Leodger B Mboya
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The growth of Small and Medium Enterprises (SMEs) globally is dependent upon a conducive business environment. However, in Tanzania, SMEs face several constraints such as limited finances, poor market accessibility, low entrepreneurial knowledge and bureaucracy which hinders their growth. This paper aims to assess the factors impeding the growth of SMEs in Tanzania. Factors such as a lack of business training, capital constraints, a lack of finance, poor infrastructure, a lack of collateral, poor production, poor technologies, tight regulations, corruption, poor market accessibility, the motivation of the business owners, limited access to information, a lack of human competencies and inadequate raw materials were measured. A mixed-method approach was used in this study, inclusive of content analysis to extract the constraints from the 21 items of literature in Tanzania. Thereafter, a quantitative approach was applied where descriptive statistics were used to determine the frequency and percentage of the factors in order to extract the most significant variables affecting SME growth in Tanzania. The findings reveal that Tanzanian SME growth is mostly impacted by financial constraints, capital constraints, poor technology and tight regulations. The study recommends that financial assistance through lowering the interest rates and simplifying the borrowing procedures must be given to SMEs to enable them to avail the necessary finance and capital for their business Also the government must support SMEs by simplifying the regulations for SMEs such as levying taxes. Business training must be provided to the SMEs by government organisation such as the Small Industries Development Organisation (SIDO) to facilitate business knowledge.
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European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.11, No.33, 2019
1
A Review of Factors Affecting the Growth of Small and Medium
Enterprises (SMEs) in Tanzania
Jesca Mhoja Nkwabi
*
Leodger B. Mboya
Doctoral candidate of the University of the West of Scotland (UWS), School of Business and Creative
Industries, 235 Southwark Bridge Rd, London SE1 6NP
Abstract
The growth of Small and Medium Enterprises (SMEs) globally is dependent upon a conducive business
environment. However, in Tanzania, SMEs face several constraints such as limited finances, poor market
accessibility, low entrepreneurial knowledge and bureaucracy which hinders their growth. This paper aims to
assess the factors impeding the growth of SMEs in Tanzania. Factors such as a lack of business training, capital
constraints, a lack of finance, poor infrastructure, a lack of collateral, poor production, poor technologies, tight
regulations, corruption, poor market accessibility, the motivation of the business owners, limited access to
information, a lack of human competencies and inadequate raw materials were measured. A mixed-method
approach was used in this study, inclusive of content analysis to extract the constraints from the 21 items of
literature in Tanzania. Thereafter, a quantitative approach was applied where descriptive statistics were used to
determine the frequency and percentage of the factors in order to extract the most significant variables affecting
SME growth in Tanzania. The findings reveal that Tanzanian SME growth is mostly impacted by financial
constraints, capital constraints, poor technology and tight regulations. The study recommends that financial
assistance through lowering the interest rates and simplifying the borrowing procedures must be given to SMEs to
enable them to avail the necessary finance and capital for their business Also the government must support SMEs
by simplifying the regulations for SMEs such as levying taxes. Business training must be provided to the SMEs
by government organisation such as the Small Industries Development Organisation (SIDO) to facilitate business
knowledge.
Keywords: SME, challenges, growth.
DOI: 10.7176/EJBM/11-33-01
Publication date: November 30
th
2019
1. Introduction
The Tanzanian SME sector has been recognised as a critical sector in the creation of employment opportunities,
the generation of income and in its contribution to GDP and economic growth. It is estimated that there are over 3
million SMEs in Tanzania that are engaged in various businesses such as manufacturing, retail and trade,
agricultural and services (Mashenene & Rumanyika, 2014). In Tanzania, small scale businesses are defined
according to the number of employees and capital invested in machinery. Therefore a micro-enterprise comprises
of up to 5 people with a minimum capital requirement of up to 5 million Tanzanian Shillings (TZS), a small
enterprise comprises of 5-49 employees with a minimum capital of 5-200 million (TZS) and a medium-scale
enterprise comprises up to 100 employees with a minimum capital of 200-800 employees. In 2003, the government
introduced the SME development policy that was aimed at alleviating poverty and improving the SME sector. The
same policy was reviewed in 2013 which documented that despite the government efforts to improve the sector,
SMEs still are faced with challenges such as a failure to compete in international markets, financial constraints,
underproduction, poor supply chain management, technological difficulties, a lack of access to raw materials and
a low business registration rate. Despite an attempt by previous researchers (Mashenene & Rumanyika, 2014;
Kimathi, 2015; Anderson, 2017) to document SME constraints, these issues still persist and as a result, SMEs still
undergo challenges which force most of them to go out of business. An explanation of such persistence that can
be given is that the country has limited resources and so addressing most of the challenges can prove to be difficult.
This research, therefore, aims to evaluate the critical impediments hindering SME growth in order to provide
feasible solutions on how these challenges can be tackled to facilitate SME growth.
2.Literature review
Business impediments have been recognised as stumbling blocks standing in the way of SME growth around the
globe. Mashenene & Rumanyika (2014) reported inadequate business training, insufficient capital and an anti-
entrepreneurial culture to be the major constraints affecting SMEs in Tanzania. Bilal, Khan & Akoorie’s (2016)
study on South Asian countries reported financial constraints to be the major impediment affecting SMEs in
Pakistan and India. The same was reported by Wang (2016), who found external financing to be a major constraint
to growth in SMEs in developing nations. Bouazza, Ardjouman & Abada (2015) reported the business
environmental factors, legal and regulatory frameworks, access to external financing and human resource
capacities to be the major constraints affecting Algerian SMEs. Baporikar, Nambira & Gomxos (2016) found that
European Journal of Business and Management www.iiste.org
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Namibian SMEs are unable to grow due to factors such as stealing and security problems from their customers, a
failure to adapt to the latest technology, access to finance, appropriate marketing strategies and a lack of skilled
manpower. Yukhanaev et al. (2015) found that Russian SMEs face political, economic and regulatory challenges
which hinder their growth. Clegg (2018) reported a lack of people-based capability, a lack of competence, a lack
of skills and information technology to be the central factors hindering SME growth in the UK.
2.1 Selected studies on SME growth constraints in the Tanzanian Context
Table 1 Selected SME studies from Tanzania
S/NO
Title Authors Major findings (Constraints facing
SMEs)
1.
Business Constraints and the
Potential Growth of Small and
Medium Enterprises in Tanzania:
A Review
(Mashenene &
Rumanyika, 2014)
Insufficient business training, capital
constraints and an anti-entrepreneurial
culture
2.
The role of microfinance in
promoting small and medium
enterprises (SMEs) in Tanzania:
empirical evidence from SME
holders who have received
microcredit from financial
institutions in Morogoro
(Makorere, 2014)
Lack of capital, lack of access to finance,
inadequate business training, poor demand
for products, lack of raw materials and poor
infrastructure.
3.
Socio-Cultural Determinants and
Enterprise Financial Sources
among the Chagga and Sukuma
Small and Medium Enterprises in
Tanzania
(Mashenene,
Macha, & Donge,
2014)
Poor partnership, capital constraints, lack
of funding, lack of collateral.
4.
Non-financial constraints to
scaling-up small and medium-
sized energy enterprises: Findings
from field research in Ghana,
Senegal, Tanzania and Zambia
(Haselip, Desgain
& Mackenzie,
2015)
Inadequate human capacity.
5.
Constraints of Accessing Debt
Financing from Commercial
Banks among Small and Medium
Enterprises in Tanzania:
(Mashenene,
2015)
Poor access to debt finance, lack of
collateral, bureaucratic loan procedures,
business informality, poor repayment
habits and corruption.
6.
Obstacles Towards Adoption of
Mobile Banking In Tanzania: A
Review
(Rumanyika,
2015)
Poor network coverage, lack of knowledge
of m-banking users, lack of enough float of
mobile money agents and ATM breakdown
and theft.
7.
The Challenges Confronting Small
Scale Businesses in accessing
Microfinance Services from MFIs
Case Study: Rural Tanzan
ia
(Kimathi, 2015) Lack of access to finance.
8.
Examining the Factors Affecting
Export Performance for Small and
Medium Enterprises (SMEs) in
Tanzania
(Mpunga, 2016)
Export competencies, inadequate and
unstable financial capital, poor production,
poor technology, ICT and information, the
standard of the products produced by the
SME and complicated business
laws/regulations.
9.
Factors Influencing Business
Succession Planning among SMEs
in T Tanzania
(Magasi, 2016) Lack of business successors.
10.
Challenges Facing Food
Processing MSEs in Tanzania: A
Qualitative Case Study of the
Sunflower Oil Industry in Babati,
Manyara
(Ekblom, 2016)
Lack of capital, lack of raw materials,
equipment & electricity for processing,
tight regulations, poor market accessibility,
and competition.
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S/NO
Title Authors Major findings (Constraints facing
SMEs)
11.
The Lack of Business Dispute
Resolution in East Africa: An
Unresolved Impediment to SME
Development?
(Tillmar, 2016)
Lack of access to finance, corruption and a
lack of business training.
12.
Challenges to Entrepreneurship
Development in Tanzania
(Isaga &
Musabila, 2017)
The motivation of the business owners.
13.
Factors Affecting Small &
Medium Enterprises (SMEs)
Startup and Growth in Tanzania
(Anderson, 2017)
Inborn individual attributes, changing
business environments, competitive
activities and location, inadequate finance,
inadequate human and social resources, and
a lack of technical and management skills.
14.
Financial Barriers and How to
Overcome Them: The Case of
Women Entrepreneurs in Tanzania
(Lindvert, 2017) Lack of capital.
15.
Social Capital In Selected
Business Associations Of Food
Processing SMEs In Tanzania And
Rwanda: A Synthetic Based
Approach
(Gamba, 2017)
Lack of social capital.
16.
Challenges to Entrepreneurship
Development in
Tanzania
(Isaga &
Musabila, 2017)
The motivation of the business owners.
17.
Social-Economic Constraints
towards Women Business Growth
in Tanzania
(Nyangarika,
2017)
Poor access to market information,
technology and finance, poor linkages with
support services, and an unfavourable
policy and regulatory environment.
18.
A structuration analysis of Small
and Medium Enterprise (SME)
adoption of E-Commerce: The
case of Tanzania
(Kabanda &
Brown, 2017)
Poor technology adoption.
19.
Microfinance Traps and Relational
Exchange Norms: A Field Study of
Women Entrepreneurs in Tanzania
(Lindvert et al.,
2018)
Lack of access to capital.
20.
Start-up motives and challenges
facing female entrepreneurs in
Tanzania
(Isaga, 2019)
Lack of access to finance, gender-related
problems and social and cultural
commitments.
21.
SME Globalization-Tanzania Case
Study
(Juma & Said,
2019)
Bureaucracy, poor Physical infrastructures,
inferior products, poor services, inadequate
business training and skills, little access to
information and limited admission to
technological developments, Marketing
difficulties, a lack of business training and
inadequate business skills.
Source: Literature Review (2019)
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2.2 Conceptual Framework
Figure 1: Conceptual framework
2.3 Hypotheses
H1: There is a negative relationship between a lack of business training and SME growth in Tanzania
H2: There is a negative relationship between capital constraints and SME growth in Tanzania
H3: There is a negative relationship between a lack of access to finance and SME growth in Tanzania
H4: There is a negative relationship between poor infrastructure and SME growth in Tanzania
H5: There is a negative relationship between a lack of collateral and SME growth in Tanzania
H6: There is a negative relationship between poor production and SME growth in Tanzania
H7: There is a negative relationship between poor technologies and SME growth in Tanzania
H8: There is a negative relationship between tight regulations and SME growth in Tanzania
H9: There is a negative relationship between corruption and SME growth in Tanzania
H10: There is a negative relationship between poor market accessibility and SME growth in Tanzania
H11: There is a negative relationship between the motivation of the business owners and SME growth in Tanzania
H12: There is a negative relationship between a limited access to information and SME growth in Tanzania
H13: There is a negative relationship between a lack of human competencies and SME growth in Tanzania
H14: There is a negative relationship between inadequate raw materials and SME growth in Tanzania
3.Research Methodology
A mixed-method approach was adopted in this study where content analysis and descriptive statistics were used.
First, content analysis was employed by the researchers by reviewing 21 recent items of literature from within the
last 5 years on SMEs in Tanzania. Next, a descriptive analysis was conducted whereby frequencies and percentages
were used to determine the most significant factors impacting SME growth. A sample size of 21 literature items
was deemed to be suitable for this study. Mashenene & Rumanyika (2014) recommended that a minimum of 12
literature items is sufficient to conduct analysis and draw conclusions. In this study, 14 variables were extracted
and analysed using frequencies and percentages, and these were presented in tabular form. The variables extracted
in the study include (i) Lack of business training (LBT), (ii) Capital constraints (CC), (iii) Lack of access to finance
(LAF), (iv) Poor infrastructure (PI), (v) Lack of collateral (LOC), (vi)Poor production (PP),(vii) Poor technologies
(PT), (viii) Tight regulations (TR), (ix) Corruption (CO), (x) Poor market accessibility (PMA), (xi) Motivation of
business owners (MOB), (xii) Limited access to information (LI), (xiii) Lack of human competencies (LHC) and
(xiv)Inadequate raw materials (IRM).
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4.Findings
Table 2. Business impediments affecting SME growth
S/N0 Article
researcher
LBT
CC
LAF
PI
LOC
PP
PT
TR
CO
PMA
MOB
LI
LHC
IRM
1.
(Mashenene &
Rumanyika,
2014)
X X
1. (Makorere,
2014)
X X X X
X X
2. (Mashenene,
Macha, &
Donge, 2014)
X X X
3. (Haselip,
Desgain &
Mackenzie,
2015)
X
4. (Mashenene,
2015)
X X X X
5. (Rumanyika,
2015)
X
X
6. (Kimathi,
2015)
X
7. (Mpunga,
2016)
X X X X X
8. (Magasi,
2016)
9. (Ekblom,
2016)
X X X X
10. (Tillmar,
2016)
X X X
11. (Isaga &
Musabila,
2017)
X
12. (Anderson,
2017)
X X
13. (Lindvert,
2017)
X
14.
(Gamba, 2017)
15. (Isaga &
Musabila,
2017)
X
16. (Nyangarika,
2017)
X X X X X
17. (Kabanda &
Brown, 2017)
X
18. Lindert et al.,
2018)
X
19.
(Isaga, 2019)
X
20. (Juma & Said,
2019)
X X
X X X X
X
(Source Literature review 2019)
Keys
1. Lack of business training (LBT)
2. Capital constraints (CC)
3. Lack of access to finance (LAF)
4. Poor infrastructure (PI)
5. Lack of collateral (LOC)
6. Poor production (PP)
7. Poor technologies (PT)
8. Tight regulations (TR)
9. Corruption (CO)
10. Poor market accessibility (PMA)
11. Motivation of business owners (MOB)
12. Limited access to information (LI)
13. Lack of human competencies (LHC)
14. Inadequate raw materials (IRM)
Based on the table above, the most extracted variables have been presented as frequencies and percentages
(frequency divided by literature).
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Table 3. Results of the SME growth constraints
Variable
Frequency
Percentage %
Lack of business training
4
19
Capital constraints
7
332
Lack of access to finance
8
382
Poor infrastructure
3
14
Lack of collateral
2
10
Poor production
2
10
Poor technologies
5
247
Tight regulations
5
248
Corruption
2
10
Poor market accessibility
3
14
Motivation of business owners
2
10
Limited access to information
3
14
Lack of human competencies
3
14
Inadequate raw
materials
2
10
Source Literature Review (2019)
From the table above, its shows that a lack of access to finance has the most negative relationship with the
growth of SMEs by 38%. This proves that most SMEs fail to grow due to financial constraints. This is followed
by capital constraints (CC) at 33%. This demonstrates that SMEs fail to grow due to being underfunded to reach
their initial business goals as set at the beginning of the business. Next to CC, both poor technology and tight
regulations scored 24% as the variables affecting the growth of SMEs. Other factors limiting SME growth include
a lack of business training at 19%, poor infrastructure, market accessibility, limited access to information and a
lack of human competencies with a similar score of 14% and inadequate raw materials, corruption, a lack of
collateral and the motivation of business owners which scored 10% in terms of their negative effect on SMEs
growth.
5. Discussion of the findings
The findings reveal that the four significant variables affecting SCM growth are financial constraints, capital
constraints, poor technology and tight regulations. This finding indicates that hypotheses 2, 3, 7 and 8 are
significant and have been accepted. This indicates that Tanzanian SMEs fail to grow due to issues in finance,
capital, poor technology and tight regulations that are imposed by the government. The results are in line with
those of Mashenene & Rumanyika (2014) who found that both capital constraints and business training
significantly affect SME growth in Tanzania. These findings also echo those of Nyangarika (2017) who reported
that finance, technological market accessibility and an unfavourable regulatory environment are the factors
standing in the way of SME growth. Moreover, these findings are incongruent with those of Juma & Said (2019)
who found that marketing difficulties, a lack of business training, inadequate business skills poor infrastructure
and technological difficulties are the main impediments to SME growth.
6. Conclusion and recommendations
The purpose of this paper was to evaluate the constraints affecting the growth of SMEs in Tanzania. The paper
concludes that financial constraints, capital constraints, poor technology and tight regulations to be the most
significant impediments to SME growth in Tanzania. These findings imply that financial institutions in Tanzania
like banks and microfinance institutions should provide financial assistance through improving their borrowing
procedures by lowering the rates and collateral. This is as SMEs are unable to afford collateral which stands in the
way of them gaining financial assistance. Mashenene (2015) recommends that simplifying the lending schemes
by removing the tight borrowing regulations is vital for easier accessibility to credit by SMEs. The same has been
suggested by Lindvert (2017) who found that discriminatory borrowing loans leads to SME growth failure as
adequate finance is not issued by banks. Additionally, the government of Tanzania should provide support to SMEs
by levying the rules and regulations to allow SMEs to grow. Shamsuddin et al. (2017) reported there to be a
positive relationship between support from the government and SME performance and growth.
SIDO should offer business training to SMEs to enable them to gain new business knowledge and to change
their way of thinking. Mashenene & Rumanyika (2014) suggest that business training can enable the SMEs to
overcome challenges such as technological difficulties, corruption and fear of competition.
Future researchers should focus on how these issues affect SME growth individually by conducting primary
data collection and analysis. It will be interesting to conduct a comparative study on the growth impediments to
SMEs in developed and developing nations.
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7. Acknowledgements
The authors would like to thank the staff at UWS for their encouragement and support to write this paper. We
would like to thank all of our family members for their caring support throughout conducting this research.
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... This observation underscores their significance as prominent contributors to job creation (Agyapong, 2016). These observations are not exceptional; the same patterns are observed throughout the continent, where small and medium-sized enterprises (SMEs) account for more than 70% of total employment and play a significant role in generating new jobs (Nkwabi & Mboya, 2019). In addition to numerical data, the socio-economic ramifications of these enterprises are substantial. ...
... The presence of uncertain regulatory frameworks, combined with political volatility, poses significant difficulties for formulating long-term corporate strategies. Factors that consist of corruption, bureaucracy, and occasionally ambiguous property rights serve as additional deterrents to both local and international investments, thereby complicating and creating uncertainty in corporate operations (Nkwabi & Mboya, 2019). ...
... corruption and incompetence. The presence of unstable economic conditions can deter both local and foreign investments, imposing constraints on the growth prospects of firms (Nkwabi & Mboya, 2019). ...
Factors Influencing Business and Entrepreneurial Survival in Africa: A Systematic Review
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  • Apr 2024
This paper examined the key factors that significantly impact the survival of businesses and entrepreneurial ventures in Africa using a systematic review. It is crucial to comprehend the factors that influence the existence of businesses to achieve enduring economic growth and advancement. By employing a comprehensive review of pertinent academic publications, this research effort merges significant findings from contemporary investigations to offer helpful perspectives on the challenges along prospects experienced by businesses operating in Africa. This study addresses various facets of entrepreneurship, such as the impact of entrepreneurial factors on achieving high levels of success, the causes of failure, the drivers of growth, and the distinct experiences of micro-businesses owned by African immigrants. Findings from the study indicate that several factors, including resource accessibility, market conditions, entrepreneurial aptitude, and government assistance, substantially influence the longevity of businesses in Africa. This study contributes to the broader academic conversation surrounding entrepreneurship in Africa. It achieves this by providing a comprehensive and current analysis of the various elements that influence the long-term viability of businesses. The outcomes of this comprehensive analysis provide valuable insights for policymakers, entrepreneurs, and researchers, enabling them to make informed decisions based on facts and promoting a conducive atmosphere in businesses striving in Africa.
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... This is according to the study the research conducted Ebrahim et al., (2023) which declares that lack of financial support, poor management, corruption, lack of training and experience, poor infrastructure, insufficient profits, and low demand for products and services. Interestingly, the presence of the government is considered a factor inhibiting the growth of SMEs (Nkwabi & Mboya, 2019) Likewise in Indonesia, the existence of small and medium enterprises is an important sector of the economy (Twins et al., 2020) because it makes a major contribution to creating jobs and increasing people's income Abduh and Remmang, 2023). Business progress according to R Pramono, LW Sondakh, I Bernardo, (2021) has links and dependencies on sources both capital and education, the need for achievement, and locus of control. ...
... These findings reflect that government policies through training frequency, capital access, and business partnerships are expected to increase the competitiveness and performance of SMEs in the city of Padang. The results of this study are strengthened by Hadiyati, 2015;Nkwabi & Mboya, 2019). These findings are different from those of Rahmi & Yuzaria, (2021) in the performance of a business is directly impacted by government policies but do not have a direct effect on the performance of SMEs, so government policies are still needed that are more focused on improving the performance of these SMEs. ...
IMPACT OF GOVERNMENT POLICIES ON THE KNOWLEDGE BASE OF SUSTAINABLE SMALL AND MEDIUM-SIZED ENTERPRISES
Article
Full-text available
  • May 2024
Small and Medium Enterprises are pivotal in academic research, policy formulation, and economic development because they drive financial growth and create employment opportunities. This study aims to evaluate the factors influencing operational performance in SMEs, focusing on the impact of knowledge and the moderating role of government policies. Utilizing a sample of 200 SME owners in Padang, selected through convenience sampling, data was collected via online questionnaires based on field studies. The analysis, conducted using Structural Equation Modeling-Partial Least Squares, explores the complex relationships between knowledge variables, government policies, and SME operations. Findings reveal that knowledge investment is crucial for the operational success of SMEs, underscoring its importance in business strategy. Government policies also positively influence SME performance, highlighting the need for supportive regulatory environments. This research contributes to a deeper understanding of the factors that support SME success and emphasizes the strategic role of government intervention. The study's novelty lies in its dual focus on knowledge and policy, offering comprehensive insights into their combined effects on SME performance. While the findings are specific to Padang, they suggest broader implications for the role of knowledge and policy in SME development globally. Future research should address the limitations of this study, including its regional focus and variable scope, to enhance our understanding of SME performance on an international scale. This study informs policymakers and SME practitioners and sets the stage for further exploration into the sustainable growth of SMEs worldwide.
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... Given the nature of their poor educational circumstances, the majority of the primary producers in the cosmetic industry lack financial literacy skills. Female entrepreneurs are unable to sustainably grow their businesses and reap maximum benefits from their resources and investments (Nkwabi & Mboya, 2019). Concepts such as Fair Trade have been introduced in these communities, but although they are steps in the right direction, they have not ensured the sustainability of female-led enterprises. ...
... Based on previous studies in various African countries, a common thread of lack of financial literacy among the female gender can be noticed. A study conducted in Tanzania reveals the lack of finance and entrepreneurial skills as a huge impediment to the growth of female-managed businesses (Nkwabi & Mboya, 2019). Female entrepreneurs may be eligible for grant funding, but they often fail to benefit from such project interventions because they lack financial skills such as crafting budgets, which are often required when applying for grants. ...
Financial Literacy Challenges Confronting Female Entrepreneurship Sustainability in the Namibian Cosmetic Industry
Article
Full-text available
  • Mar 2023
This paper analyses the impact of financial literacy on the sustainability of female entrepreneurship in the cosmetic industry in Namibia.
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... These variables encompass financial limitations, capital constraints, inadequate technology and stringent regulatory frameworks. Together, these factors exert a substantial influence on the growth and overall development of entrepreneurial ventures (Nkwabi & Mboya, 2019). ...
University innovation and start‐ups: Barriers and facilitators experienced by nursing faculties – A content analysis study
Article
Full-text available
  • May 2024
Aim University start‐ups have gained significant popularity as a means of translating knowledge and research into practical applications. However, there is a lack of understanding regarding the experiences and perspectives of nursing faculties engaged in start‐up ventures. The objective of this study was to explore valuable insights into the barriers and facilitators within this context for promoting success, generating entrepreneurial attitudes, as well as enhancing the sustainability of nursing faculty‐led start‐ups. Design We employed a content analysis methodology to capture the real‐life experiences of nursing faculties involved in university start‐ups. This approach is an effective way to gain a comprehensive understanding of the subject. Methods Data were collected using semi‐structured interviews. Graneheim and Lundman's step was used for analysis and to identify recurring patterns and themes within the collected data. Sampling was done purposefully, with convenience and snowball techniques until data saturation. The MAXQDA version 10 software was utilised to easily analyse, code and present data. Results The analysis revealed four major themes encompassed: motivational factors, personal attributes, limited entry support and barriers to scaling. These themes shed light on factors, support systems, challenges faced during growth as well as personal characteristics highlighted by the participants. Our study highlighted the factors influencing entrepreneurship in nursing faculties. Addressing the challenges of this study requires enhancing support systems and fostering personal development for entrepreneurial success in healthcare innovation. Policymakers can promote university education to expand the entrepreneurship process using more facilities and make more services accessible.
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... Studies conducted in Tanzania have unveiled that, growth of SMEs is hindered by lack of financial support from the government, lack of essential entrepreneurial skills (Kazimoto, 2014), inadequate business training, insufficient capital, and anti-entrepreneurial culture (Mashenene & Rumanyika, 2014). In a recent study, Nkwabi and Mboya (2019) identified inter alia financial and capital constraints as critical among SMEs in Tanzania. Luckily, constraints related to business training and capital issues can be addressed by external stakeholders such as academic institutions and financial institutions through the provision of formal training and financial loans respectively. ...
Conceptualizing Strategic Entrepreneurship and SMEs Performance Using the Resource-Based Theory:: A Literature Review
Article
  • Dec 2019
Small and Medium Enterprises (SMEs) contribute significantly to socio-economic development of any country. Despite the contribution, poor performance of SMEs has been reported due to various constraints. Strategic entrepreneurship has been identified as one of the approaches that can be used to promote SMEs performance. We aimed at developing a conceptual model that describes the influence of strategic entrepreneurship on SMEs performance under the mediation of competitive advantage. Guided by the Resource-Based Theory, the synergy of the Resource-Based View and the Knowledge Based View, we adopted learning orientation, strategic resources management and entrepreneurial orientation as components of strategic entrepreneurship. Through integrative literature review approach, we developed the conceptual model, which depicts the direct and indirect influence of strategic entrepreneurship components on SMEs performance. Furthermore, the model depicts the mediating effect of competitive advantage on the relationships between strategic entrepreneurship components and SMEs performance. We have contributed to the existing literature through introduction of strategic resources management as a component of strategic entrepreneurship, introduction of direct and indirect influences of strategic entrepreneurship components on SMEs performance and introduction of competitive advantage as a mediating variable between strategic entrepreneurship and SMEs performance. We have recommended for the testing of the proposed model in future studies across different industries to obtain empirical evidence. This wouldresult to further theoretical and practical contributions to the existing knowledge.
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... These challenges are confounded by many other factors that constrain not only young people and women as service providers in agriculture, but African entrepreneurship in general. These include but are not limited to high cost of doing business, inadequate natural resources, poor infrastructure, inadequate financing and economic downturn, government bureaucracy and fluctuating market prices (Igwe et al. 2018;van Klyton and Rutabayiro-Ngoga 2018;Nkwabi and Mboya 2019), and more recently the COVID-19 pandemic (Kadzamira et al. 2023). These factors are worsened by the seasonality of African agricultural production and the vagaries of a changing climate. ...
African women and young people as agriculture service providers—business models, benefits, gaps and opportunities
Article
Full-text available
  • Mar 2024
We use a combination of a global desk review of the literature with information from an on-going action research in Kenya to provide insights into the main characteristics, benefits and shortfalls of business models for engaging women and young people in agricultural service provision in Africa. The findings demonstrate that the engagement of African women and young people in agricultural service provision is not a panacea to the challenges they face. However various business models have been successful in contributing to economic empowerment, to increasing entrepreneurial activities and to upskilling of women and young people engaged as service providers. Business models that are successful are place-based and people-focused, market-driven and focused on value chains. Challenges however abound due to various factors, hence for sustainability there is need for multi-sectoral inter-institutional collaboration that pulls in funding and which makes a case for private sector buy-in. Future research should focus on increasing the evidence base to understand if successes with inclusion of women and young people in agricultural service provision has an influence on emerging agricultural policy. Research should also rigorously assess the extent to which successful agricultural service provision business models are engendered, provide sufficient levels of renumeration and the extent to which they impact farmer outcomes.
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Buku Relevansi Debt Management Literacy Usaha Kecil Menengah
Book
Full-text available
  • Jun 2024
Buku "Relevansi Debt Management Literacy UKM" merinci bagaimana Usaha Kecil dan Menengah (UKM) di negara berkembang menghadapi tantangan besar dalam memperoleh pembiayaan karena asimetri informasi antara UKM dan lembaga pembiayaan. Penelitian ini menggali teori signaling dan teori perilaku terencana, menyoroti pentingnya literasi manajemen utang dan pengendalian diri dalam menunjang keberhasilan UKM dalam pembayaran utang. Menjabarkan bagaimana teori signaling menjelaskan komunikasi antara pemberi pinjaman dan UKM, yang seringkali mengirim sinyal untuk memvalidasi kelayakan kredit mereka. Fokusnya adalah pada dilema pemberi pinjaman yang menghadapi informasi yang tidak lengkap atau tidak jujur dari UKM, yang dapat mengakibatkan keputusan pembiayaan yang suboptimal. Selanjutnya, buku ini mengaitkan Thoery of Planned Behaviour dengan Financial Behaviour (perilaku keuangan) UKM, memeriksa bagaimana sikap, norma subjektif, dan kontrol perilaku yang dirasakan mempengaruhi keputusan pembiayaan mereka. Diskusi mendalam tentang bagaimana literasi keuangan memengaruhi kemampuan UKM untuk mengelola utang mereka secara efektif. Ditekankan bahwa pengalaman keuangan yang lebih besar, pengetahuan, dan keterampilan manajemen utang dapat memperbaiki perilaku pembayaran utang UKM. Analisis lebih lanjut membahas tantangan dan hambatan yang dihadapi UKM dalam mengakses kredit, termasuk rasa takut penolakan dan kurangnya aset sebagai jaminan. Buku ini mengeksplorasi hubungan antara diversifikasi sumber pendanaan dan stabilitas keuangan UKM, menunjukkan pentingnya manajemen utang yang efektif untuk pertumbuhan dan keberlanjutan bisnis. Terakhir, buku ini mempertimbangkan dampak dari literasi manajemen utang pada keputusan pinjaman UKM dan bagaimana peningkatan pengetahuan dan keterampilan keuangan dapat membantu UKM dalam mengelola kewajiban finansialnya dengan lebih baik. Disajikan temuan bahwa UKM dengan literasi keuangan yang lebih tinggi memiliki kemungkinan lebih besar untuk memenuhi kewajiban pembayaran utangnya dan menghindari gagal bayar. Secara keseluruhan, "Relevansi Debt Management Literacy UKM" menawarkan wawasan yang komprehensif tentang dinamika pembiayaan UKM, menyoroti pentingnya literasi keuangan dalam meningkatkan akses ke pembiayaan dan mengelola utang secara efektif
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Outcomes of E-Commerce Adoption on Enhancing Small and Medium Enterprises Performance in Tanzania: A Case of Ilala Municipal Council
Article
Full-text available
  • May 2024
The study was carriedout examine the outcomes of e-commerce adoption on enhancing small and medium enterprises performance in Tanzania, a case study of Ilala Municipal Council. We investigated SMEs owners and operaters using online surveys. It was guided by three independent variables, namely e-commerce information quality, system quality and service quality as independent variables while e-commerce use and user satisfaction were mediating variables. The study used cross-sectional survey research design, adopted a positivist philosophy, a deductive approach, a quantitative mono-method, and a survey strategy. On examining the influence of e-commerce information quality on enhancing SMEs performance, the study has found that there is insignificant direct influence of e-commerce information quality on e-commerce use. The study has found that e-commerce use has a positive significant influence on performance of SMEs. The study also has found that e-commerce information quality has a positive significant influence on e-commerce user satisfaction. Furthermore, the study has found e-commerce user satisfaction has a significant positive influence on SMEs’ performance. On examining the influence of e-commerce system quality on enhancing performance of SMEs, the study has found e-commerce system quality has a positive significant influence on e-commerce use. The study has found e-commerce use has a significant positive mediating influence on performance of SMEs. The study also found e-commerce system quality has a positive significant influence on e-commerce user satisfaction. Additionally, the study has found e-commerce user satisfaction has a positive significant influence on performance of SMEs On examine the influence of E-commerce service quality on enhancing SMEs performance, the study has found E-commerce service quality has a positive insignificant influence on E-commerce use. Additionally, the study has found e-commerce use has a positive significance influence on performance of SMEs. The study also found e-commerce service quality has a positive insignificant direct influence on e-commerce user satisfaction. On the other hand, the study has found that e-commerce user satisfaction has a positive significant influence on performance of SMEs. This is a comprehensive study conducted in Tanzania regarding the adoption of ecommerce, and factors influencing post-adoption of ecommerce improve SMEs performance.
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The Impact of Innovative Strategies on a Small-Scale Service Industry in Ghana
Chapter
  • Mar 2024
A lot of research studies have shown that a direct and positive relationship exists between innovative strategies (IS) and an organisational performance. However, the relationship may not be simple and clear to understand. This study used a qualitative, simple descriptive case study approach to critically investigate the level of innovative strategies approach to the growth of Compressor Techniques Limited, Ghana. A semi-structured questionnaire was utilised to interview employees (participants) at Compressor Techniques Limited to gather primary data for the study. Purposeful sampling was used to select twenty (20) participants who have worked in the organisation five years and above to gather rich data for the data analysis. The research findings showed the company organizes workshops and seminars to improve upon the abilities of employees. It was recommended that the organization should regularly review and update their internal structures and decision-making processes for approving innovative projects so that the company can reach its productivity goals.
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Perceptions of growth-impeding constraints acting upon SMEs’ operations and the identification and use of transitionary paths to elevate them
Article
Full-text available
  • Feb 2018
  • INT J OPER PROD MAN
Purpose The purpose of this paper is to know which growth-impeding constraints are perceived to act upon operations of small- to medium-sized (SME) companies by their owner-managers and to recommend transitionary paths to elevate constraints and increase contribution levels made by SMEs’ operations. To do so, this research has been primarily founded upon Hayes et al.’s (2005) operations contribution model for differentiating between different levels of operations’ contribution, and secondarily on the theory of constraints philosophy to explain the perceptions of constraints found at each level – current and future. Design/methodology/approach An open-ended survey and a series of group workshops have gathered new empirical data about these perceptions, which were coded using the relational content analysis to identify a parsimonious set of perceptual growth-impeding constraint categories. The most popular transitions were identified and a correlation of frequency rank orders between “perceived current” and “perceived future” constraints categories was calculated, and likely transitionary paths for growth are discussed. Three SME case studies were documented in related action research to contextualise survey findings. Findings The most popular transition was from “neutral” to “leading”. A lack of people capability was perceived to be the most commonly reported growth-impeding constraint category, followed by a combined lack of process competence and product and service innovation, further followed by a lack of skills in information technology automation. In addition, a new conceptual model has been generated inductively to address shortcomings found in the original operations contribution model (Hayes et al., 2005) during its application to UK SMEs. The new model is referred to in this paper as the “Operations Growth Rocket”. Research limitations/implications This research only used data from UK SMEs. Practical implications This work should help SME owner-managers to overcome growth-impeding constraints that act upon their operations and assist them to develop more effective actions and paths to increase the contribution levels made by their operations. This in turn should support growth of their organisations. Findings will also inform teaching about more effective operations management in SMEs. Social implications This work should help UK SMEs to grow, which in turn will strengthen the UK economy. Originality/value A novel approach and new data from 208 SMEs modify a classical operations contribution model (Hayes et al., 2005). This is achieved by considering transitionary paths to be meta-categories continua abstracted from constraint categories combined with case data for moving towards higher levels of operations contribution, rather than using discrete growth-impeding and growth-constraining “levels”. This research has inductively generated a new version of the classical contribution model that should be more suitable for stimulating growth in (UK) SMEs.
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Malaysian SMEs Performance and the Government Business Support Service: The Moderating Effects of Absorptive Capacity
Article
Full-text available
  • Dec 2017
The purpose of this study is to test and develop absorptive capacity as a moderator of the relationship between Government Business Support Service (GBSS) and SMEs Performance in Malaysia. A random sampling technique was used on 150 usable questionnaires and data was analysed by SPSS 19. Statistically, the results confirmed that financial and non-financial support by government positively related to SMEs Performance and there is an interaction of absorptive capacity as a moderator on GBSS and SMEs Performance. Keywords— GBSS, SMEs, Absorptive Capacity
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The Challenges Confronting Small Scale Businesses in accessing Microfinance Services from MFIs Case Study: Rural Tanzania
Article
Full-text available
  • Nov 2015
Microfinance services from microfinance institutions assist small scale businesses in the development and expansion of their businesses especially in rural areas. This study was carried out to evaluate the accessibility of microfinance services together with the challenges that small scale businesses are facing when accessing microfinance services from the main stream of MFIs in Mvomero district in Tanzania. The data collected through questionnaire were administered to 195 small scale businesses and analyzed with Statistical Package for Social Scientists (SPSS) version 21. The study shows that small scale businesses have access and also have benefited in microfinance services from different MFIs. Nevertheless, there are many challenges confronting small scale businesses when accessing microfinance services. Therefore, the researchers recommend that microfinance institution should set up more flexible, reasonable and attractive requirements in financing small scale businesses. Also, the government and other stakeholders should set a good financial structures and legal systems which will allow the financial institutions especially microfinance institutions to provide finance startups to newly establish businesses.
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Factors Influencing Business Succession Planning among SMEs in Tanzania
Article
Full-text available
  • Jan 2016
Abstract The study intended to investigate factors influencing business succession planning among Small and Medium Enterprises (SMEs). It assessed how demographic characteristics, business size, and family related factors influence business succession planning. The research methodology involved surveying 25 SMEs and among 104 interviewed owners/supervisors, only a sample of 88 was analyzed by Chi-square to establish the relationship between independent and dependent variables. The findings show that the higher the age of SMEs owners, the higher the possibility of preparing the business successors. Also, males are associated with more chance of being involved in business succession planning, the sons having a big chance of being the successors. Furthermore, increase in the level of education of SMEs owners has a positive influence in preparing the successors. Similarly, business size has a positive influence on business succession planning, the bigger business being given the first priority. In contrary, increase in involvement of family members in SMEs has no influence on business succession planning. Lastly, increase in communication among family members has a positive influence on business succession planning. The study concludes that SMEs owners don’t prepare the business successors while still energetic. It further concludes that gender has an effect on business succession planning and that the owners who have low level of education die with their businesses because they rarely prepare the successors. The study recommends that the owners of SMEs should prepare the right business successors in time to make their businesses remain sustainably. Key words: Business succession planning, demographic characteristics, SMEs
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Start-up motives and challenges facing female entrepreneurs in Tanzania
Article
  • Oct 2018
Purpose Research on women-owned business is more extensive in developed countries than in developing countries and such one cannot compare the results. This paper aims to examine the motives of women in Tanzania (a less developed country) to start their own businesses and the challenges they faced in running their businesses. Design/methodology/approach Based on 400 response to a semi-structured questionnaire and in-depth interview with 20 female entrepreneurs. Subsequently, descriptive and factors analysis were performed to analyze the data Findings Based on survey responses, the primary reason for starting a business was to create employment for the woman herself. Other motives include supplementing income and enabling women to be able to do the kind of work they wanted to do. According to the factor analysis, female entrepreneurs are driven more by push factors than pull factors. The most serious problems faced by female entrepreneurs are lack of access to finance, gender-related problems and social and cultural commitments. Research limitations/implications The sample was selected from urban areas of only three regions, out of 26 regions in Tanzania. Researchers may extend the study to other regions; also, the non-probability sampling method used in this study essentially means that there is a limitation to the extent to which the research findings can be generalized to the rest of the population of female entrepreneurs in Tanzania. Practical implications Policy makers, financial institutions and all organization that have a stake on development on female entrepreneurs in Tanzania should design policies and programs that encourage and promote the creation and growth of businesses. Collective efforts from the government, public and private institutions and NGOs are needed to eliminate the challenges, especially gender-related problems. Practical implications By studying female owner-managers’ motivations and constraints, the author suggests that to a greater extent, gender-related problems, social and cultural commitments and access to finance and networks are the constraints faced by female entrepreneurs. Originality/value The research on female entrepreneurs in the context of Tanzania is scarce, this study responds to a need of better understanding women motivations and constraints. By studying these factors, this study shows that startup motives and constraints faced by female entrepreneurs are unique to different contexts.
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Microfinance Traps and Relational Exchange Norms: A Field Study of Women Entrepreneurs in Tanzania: Journal of Small Business Management
Article
  • Feb 2018
  • J SMALL BUS MANAGE
In interdependent social groups, microfinance traps occur when conflicts arise between borrowers’ affective ties related to family needs and instrumental ties related to obligations toward their loan group. Thus, the social capital that facilitates microfinancing can lead to conflicting obligations toward business needs and economic obligations toward family. Building on an inductive field study among female entrepreneurs in Tanzania, we conceptualize microfinance traps. By using relational contract theory to interpret the qualitative data, we argue that microfinance traps can be reduced by balancing role integrity, preserving norms and reciprocity, and harmonizing the social matrix toward the family and loan group.
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Social Capital in Selected Business Associations of Food Processing SMEs in Tanzania and Rwanda: A Synthetic Based Approach
Article
  • Jan 2017
The presence of social capital has been instrumental for effective performance and development of business associations, the private sector and the economy at large. Sometimes social capital has been equated to networking and associational undertakings in socio-cultural and economic settings. This study analyses the extent to which social capital is experienced in selected business associations of food processing SMEs in Tanzania and Rwanda in terms of trust and social cohesion, collective action and information sharing. Target population of the study was food processing SMEs. Sample size was 145 SMEs. Responses of the subjects were collected through questionnaires and comparative analysis was used. Based on World Bank Declaration of twin initiatives which states that: ?Institutional reform and the promotion of social capital are key elements on the road to empowerment?? It is observed that Rwanda had put the twin initiative into practice and enabled the shift of socio-cultural and economic paradigm. It is concluded that Rwandan business associations have more social capital than Tanzanian ones and so would influence the private sector and the economy. The implication is that Rwanda as a country with organised and empowering social capital structures can develop faster than Tanzania.
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A Structuration Analysis of Small and Medium Enterprise (SME) Adoption of E-commerce: The Case of Tanzania
Article
  • Jan 2017
There have been several studies on E-Commerce adoption in developing countries. However, few have investigated least developed countries (LDCs). Of those that have, their findings tend to be descriptive in nature – falling short of a theoretical contribution grounded in the sociocultural context. The purpose of this paper is to provide a theoretical analysis of E-Commerce adoption in an LDC, Tanzania. Specifically, the study seeks to identify structural practices associated with E-Commerce in Tanzanian SMEs. Using structuration theory and following an interpretivist stance the findings show that Tanzanian SMEs enact three major e-commerce structural practices: (1) Marketing and image-building through use of websites, (2) Transacting through extensive use of mobile technology (3) Technical problem-solving through establishing partnerships. These practices are informed by organizational and environmental factors that define the sociocultural, technological and economic contextual setting. Considerable evidence is found that SMEs use websites in a limited way, as they draw upon their understanding of websites as being incompatible with the Tanzanian cultural bargaining system, which is characterised by cash transactions and face to face bargaining. Websites are viewed primarily as a platform from which SMEs can portray a sophisticated image and advertise/market their products. SMEs use mobile technology extensively, as they draw on the technology’s ability to offer transactive capability, mobility and communication. Findings also point to technological challenges which SMEs face from the environment, mainly from a lack of supporting industry and institutional support. SMEs hence establish partnerships with international organisations that can support them in overcoming technological challenges. Partnerships with large ICT organisations require stringent conditions, such as the requirement for SMEs to have certification in order to be affiliated. The study gives practitioners a better understanding of how SMEs perceive E-Commerce in Tanzania amidst organisational and environmental opportunities and constraints, and in so doing practitioners can better design appropriate E-Commerce context-specific policies and interventions that address SME problems. This will ensure that available resources become utilised in a more effective manner without negative consequences.
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