A Dissertation submitted in Partial Fulfilment of the Requirement for the Degree of Master of Business Administration (MBA) of Mzumbe University
The reason that drives the researcher to conduct this study is to show the importance of SMEs to access financial support from financial Institutions because they are the driver of the economy as they employ big number of Tanzanians, creativity and innovation come from them, they need loans from banks and other financial institutions to make their dream come true. The study focused on examining factors affecting SMEs in securing loans from financial institutions was conducted at the National Bank of Commerce (NBC), more specifically the study intended to Identify SMEs barriers in securing loans from financial institutions; to examine strategies needed to improve loan provision to SMEs and to determine the problems associated with opening a bank account for an SME. A sample of 120 respondents were used, the study use cased study design.The study found that majority of the respondents (51.67%) identified that high interest rate is the strong barrier in securing loans from financial institutions, also if of the respondents (59.17%) suggested lowering interest rate could improve loans accessibility to small businesses, finally the study found that most of the respondents (45%) stated introduction from existing customers is the problem in opening bank account.The study concludes that most of the small business owners fail to access loans due to high interest rate. In general most of the clients do not meet procedures therefore banks fail to get clients to lend. As well majority of the small business owners lack awareness concerning the facilities provided by the bank, bank provide training to small business owner on the importance of register their businesses. The study recommends that banks in Tanzania also need to review their policies on the maximum amount of loans to SMEs to reflect the market demands, and the Government should consider providing guarantee to those SMEs sectors perceived as too risky by Banks due to lack of collaterals.