A Research Report to be submitted in Fulfillment of the Requirements for Award of the Master of Science-Entrepreneurship of Mzumbe University
Small and medium enterprises are important for the growth of the developing countries like Tanzania. In Tanzania, small and medium enterprises have been facing a number of problems that limited their growth. One among those constraints is lack of capital necessary to start-up or expands their business ventures.
The researcher investigated whether the access of capital enhance the performance of Small and Medium Enterprises in Zanzibar. The study was conceptual research design and both qualitative and quantitative methods were used. In the study seventy six (76) respondents were involved and the requisite data collection methods the questionnaires, Interviews and Observation methods have been used.
The collected data have been analyzed by using SPSS and then transferred to Microsoft Excel to create some charts and diagrams. Other quantitative and qualitative have been presented and analyzed through tables so as to avoid the unnecessary complications.
The overall findings indicate that it is undisputable fact that the accessibility of financial capital from different financial institutions has never improved the performance of many SMEs in Zanzibar.
The study shows that in many places particularly urban district there are only few known entrepreneurs who were able to meet the maximum performance of their businesses despite of many external sources available to finance their businesses. Many SMEs do not prefer to apply for loans from whether public or private financial institutions believing that the overall access of financial capital would not help them to meet at the maximum performance.
To overcome the overall factors hindering the performance of SMEs the researcher has recommended that; a complacent behavior among the people should be removed, advised to build the hard working behavior to their people.Suppressive credit requirements should be removed and the interest rates are advised to be lowering so as to benefit both sides. Not only that but also collaterals requirements are advised to be removed so as to enable more SMEs to acquire loans. Financial institutions are advised to hire the technical and operational experts for provision of technical advises to the borrowers. NACTE is advised to modify the education curriculum that will enable secondary livers to have the entrepreneurship literate. The tax policies should be also modified so as to enable the micro and very small enterprises to survive and grow.