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Shortage of access to finance has been identified as one of the major constraints of small
business growth. One of the alternative way to solve this problem of capital, are loans
access from financial institutions. This work was intended to find out the impact of the
individual loan to entrepreneurs in Tabora town. The specific objectives were to find out
how loans provided by commercial banks were used by the entrepreneurs, to examine
the business performance after loan utilization, to assess the outcome of the loan amount
provided to entrepreneurs.
The research employed case study design. The study used 91 respondents who are loan
beneficiaries from commercial banks. It employed probability sampling, primary data
were collected using questionnaires and observations, and documentary review for
secondary data. Data were analyzed by using SPSS.
The result findings revealed that most of the respondents who obtained loans from
commercial banks in Tabora town agreed loan had brought positive changes in their
business performance, expanded and improved their entrepreneurial activities, and nongenerating
income activities, profit increased, employments were created, household
poverty level decreased, economic position was raised and others.
The study concluded that the role of commercial banks toward entrepreneur’s success is
absolutely important because there are positive effects on performance of their business
in terms of sales revenues, physical assets, and financial assets among others.
It was recommended that, commercial banks should provide fair loan amounts by
looking monthly sales and other entrepreneur's incomes, commercial bank should
provide management training to entrepreneurs before providing loans, entrepreneurs
should seek business knowledge from training institution and others, and loan should
beutilized for business purpose and not for other uses. |
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