A Dissertation Submitted to the Partial Fulfillment of the Requirements of the Award of the Degree in Masters of Business Administration (MBA) – Corporate Management of Mzumbe University.
The motive behind carrying this study was due to the experience that, there are several studies and policy that have been done on small enterprises in relation to poverty reduction. Also Tanzania is one of the 191 United Nations Member states that have pledged to meet the eight (8) United Nation Millennium Development Goals (MDGs) by 2015. The first goal of these UN-MDGs is on eradication of extreme poverty and hunger by cooperative, micro-financing and entrepreneurship. The purpose of this study was to assess the contribution of small enterprises on poverty reduction by assessing the impact of small enterprises’ job creation towards poverty reduction, to determine the relationship between profit generation/earnings with poverty reduction. And lastly to determine the relationship between small enterprises’ human resources development and poverty reduction.
This is a cross-sectional study design, conducted in Morogoro municipal district. Study population comprised of 78 small entrepreneurs. A simple random sampling was employed to obtain a desired sample. Primary data were collected using questionnaires while secondary data were collected through documentary reviews. Data analysis was carried through Statistical Package for Social sciences (SPSS) programme where descriptive and multiple regressions were both employed.
Findings revealed that, 71.79% of small entrepreneurs perceived that their life is better today than before through small business. Also, there were positive relation between job creation, profit generation, human resources development, and income. Therefore it is concluded that small enterprises has a contribution in poverty reduction.
For this reason, it was therefore concluded that government and stakeholders should formulate policy framework and strategies that outline the intention of the government for SME sector. Also the strategies should address the constraints facing small business. Moreover the policy should encourage establishment of new business and strengthen the new ones to increase competition and improve the quality of job provided by small business.
Policy measures for improving access to credit should be developed based on small business preferences and needs. Institution capacity building for lenders and borrowers should be an integral part of every credit program that will be provided in order to increase income for the small entrepreneurs.