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The main purpose of this study was to determine the contribution of microfinance on the
growth of micro enterprises in Mwanza city. The research was guided by four specific
objectives that are: To examine credit access among micro enterprises in Mwanza city from
PRIDE Tanzania, to find out whether clients are satisfied with services provided by PRIDE
Tanzania in Mwanza city, to explore the perceived contribution of Microfinance to the
growth of Microenterprises in Mwanza city, and to determine the challenges facing MEs on
effective utilization of credit provided by PRIDE Tanzania in Mwanza city. A descriptive
research design was used to conduct this study. The population consisted of 3500 PRIDE
Tanzania MEs who have benefited from PRIDE Tanzania. A formula was used to determine
sample of 358 loan beneficiaries. Primary data was collected by using structured
questionnaires. Data was analyzed by using SPSS. The research findings on the policy and
regulatory framework revealed that legal environment was generally hostile to SMEs. The
finding on implementation strategies revealed that, the loan repayment period was short. The
findings on the contribution of MEs also revealed that most beneficiaries under the study had
expanded their businesses and increased their household income. The researcher recommends
that the membership fee should be reduced so as to incorporate the very poor into the system.
This will enable them to get access to the products and services that those just below / or just
above the poverty line enjoy. The mode of repayment should be revised so that the poorest
can borrow without collateral. The suggested areas for further research as regards to interest
rates include the review of interest rates by MFI to cater for operating expenses of
microfinance and at the same time facilitate growth for their clients businesses. Also, there is
a need to conduct a comprehensive study for setting the repayment system that will be
favorable to MEs by considering the grace period. |
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