A Dissertation Submitted in Partial/Fulfillment of the Requirements for Award of the Degree of Master of Science in Accounting and Finance (MSc A&F) of Mzumbe University
The financing of Small and medium-sized enterprises (SMEs) have been a topic of great interest among both policy-makers and researchers because of the role they play. Objective of the study was to assess the effect of NMB financing on the performance of SMEs in Lindi municipal. It was observed that several studies have been conducted on the importance of SMEs for economic growth, but no specific study has been conducted on the effect of NMB financing on performance of SMEs in Lindi and their effects of financing were not known.
Simple random sampling technique was employed in selecting the 100 SMEs from the population of 400 Smes that constituted the sample size of the research. Structured questionnaires was designed and distributed to facilitate the acquisition of relevant data. Descriptive statistics in spss and excel were used as analytical tools. Pearson correlation was used to test the relationship between the NMB financing and the Smes performance, chi-square test also was used test the null and alternative hypotheses.
The findings of the study revealed that, the majority of the SMEs acknowledge positive contributions of loans towards their businesses and improved standard of living among family members.
Tax Policy implication in this study:
The tax regime in Tanzania is unfavorable for SMEs development; the present tax regime imposes a major burden on SMEs performance. The tax rates and compliance costs are the same for both the SMEs and large enterprises. Government should review the legal, tax structure and regulatory framework.
Future research
The study was focused on SMEs that operates in Lindi Municipal; the findings may not relevant in rural areas. Therefore, future research may be conducted in rural areas. The current research was on the effect of NMB financing on performance of SMEs, the future research may be conducted on the effect of commercial banks financing on performance of SMEs in all municipals in a country to broaden the scope in order to give a better picture.