The impact of rural, financing on the performance of small and medium enterprises: a case of Mufindi community bank
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Date
2007
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Sokoine University of Agriculture
Abstract
The importance of small and medium enterprises sector has necessitated to the great
emphasis on small and medium enterprises financing for the development of the sector.
However, with the current small and medium finance institution in Tanzania, there is no
sufficient documentation of the extent and strength of small and medium enterprises
performance as a result of accessing credit from MFIs. The study thus aimed at evaluating
the performance of SMEs a result of provision of credit from MuCoBa in Mufindi. Primary
data were collected using questionnaires from selected samples of 45 small and medium
respondents. Borrowers and institution respondent were interviewed f. Secondary data
were collected from the university of Sokoine libraries and MuCoBa. Descriptive statistic
(means, percentages, frequencies) were major tools employed in data analysis. Small and
medium enterprises financing was confirmed to play a vital role in boosting sales revenues,
Enterprises with access to credit employed significantly more laborers than those without
credit. Many borrowers respondent (68.9 %) reported to acquire more assets than non
borrowers (13.3 %). Also micro enterprises with credit have higher ability to meet their
basic needs and other household’s expenses like paying school fees, meeting medical etc.
Hence, SMEs financing has a major role for starting and sustainable growth of profitable
enterprises for the development of SME sector. The study recommended that proper
measures such as creation of favorable environment for SME sector, conducting of
feasibility study to SMEs before issuing credit to SMEs, extending credit for business start
up, provision of grace period to SMEs after Ioan disbursement, extension of repayment
period, provision of entrepreneurship skills and business training for SMEs operators and
increasing the size of the base loan.
Description
A Dissertation
Keywords
Small - medium enterprises sector, Medium enterprises, Mufindi Community Bank, MuCoBa