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The study was mainly aimed at assessing the link between perception of financing
barriers and sources of finances by small traders in Morogoro. The study specifically
looked at the ratio between different types of finances (capital mix), the reason for
choosing the types of finance, the perceived barriers of each source of finance, and lastly
the relationship between the ratio of source of finance and the perceived barrier of each
source of finance. The study used a cross sectional study design, through questionnaires
and observations and it was analyzed using SPSS. A total of 85 small traders were
surveyed and five sources of financing were interviewed to get the information useful
for assessing the perceptions on sources of finances.
The results obtained number of perceived barriers of each source of finance that
determine the reason for choosing type of financing strategy. The author categorised the
results into two groups of barriers; barriers that are from internal sources, (inadequate
education and proper training, etcetera) and barriers that are from external sources, (high
interest rates, grace period, lack of collateral, etcetera). The study found that, barriers
that are from external sources of finance are almost the same, and there is no special
treatment for small traders to make able to increase their capital through those sources of
finance.
Based on the findings, the study recommends that proper trainings should be offered to
small traders, this will decrease the perceptions and start to see those sources of finance
as a good help to increase their capital. Also there is a need of big financial institutions
to give them special treatment, like lowering the interest rates and offering long grace
period compared to large traders, so as to make their business growing. |
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