A Dissertation Submitted in Partial Fulfillment of the Requirements for Award of the
Degree of Master of Business Administration in Corporate Management of Mzumbe
University.
Small and Medium-sized Enterprises (SMEs) in Mwanza are very important to economic
growth. They have a significant effect on employment and economy of the country. The
enterprise structure is mainly dominated by micro enterprises and the growth intensity is steady
but still at a low level. Since SMEs are important contributors to economic development, it is
therefore relevant to study challenges hindering their potential growth. These challenges are
looked from two different perspectives; external and internal challenges which have an impact
on the growth of SMEs.
This research is an evidence of four SMEs (FURAHA, NDIYO, KUKU POA and SIMBA) in
food industry at Mwanza city, and together with previous literature a conclusion of internal and
external challenges influencing their growth can be reached. The primary data was collected
through both qualitative (interviews) and quantitative (questionnaire) approaches with operators
of the selected SMEs.
The data was analyzed by using a Statistical Package for Social Sciences (SPSS). Specifically,
descriptive statistics were taken from this tool. Descriptive analysis was used to reduce the data
into a summary format by tabulation and measure of central tendency.
The findings of the research reveal that there are a number of significant factors affecting SMEs
growth. The major factors being financial and politico-legal factors followed by working
premises, entrepreneurial factors, management, technological, marketing and infrastructural
factors. They also speculate the reasons to why some of the SMEs in food industry grow while
others do not.
The study suggests that, The Bank of Tanzania should review the interest rates on loan because it
seems to be very high; otherwise the government should find amicable solutions either to
subsidize the SMEs with some sort of incentives. To make the selected SMEs competitive and
profitable, increasing the capacity and skill of the operators through continuous trainings,
experience sharing from successful enterprises, and provision of advice and consultancy are
crucial. Moreover, improved provision of necessary infrastructure and enabling the environment
for business operations is generally an imperative.