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The aim of this study was to examine factors for inadequacy loan management in small merchandise enterprises, a case of selected women merchandise entrepreneurs in Nyamagana district Mwanza. The study examined the sharp decrease of loan management on women merchandise enterprises. This was pursued under the specific objectives that were to identify nature of loan provided, to identify ways used to manage loan and to determine the factors for inadequacy in loan management in small merchandise enterprises.
A descriptive study research design was used to quantitatively examine the relationships among variables. Women entrepreneurs from four microfinance institutions were selected to represent the entire population in Nyamagana district. The purposeful sampling technique and stratified sampling technique were used to select the 144 respondents from the particular formal microfinance institutions women clients that were the sample size required for the research study. In the study report both quantitative and qualitative methods were used to analyze data from the selected respondents. Data were coded and processed using the Statistical Package for Social Science at Mzumbe Mzumbe University in Morogoro.
The findings reveal that nature of loan provided, ways used to manage the loan, poor accounting system, higher interest rate, lack of management skills, lack of business experiences, mismanagement of resources and unforeseeable risks, poor decision making, weak business associations, poor planning in their business and lack of enough entrepreneurship knowledge are the factors that affect loan management in small merchandise enterprises. The findings also revealed that among challenges facing small merchandise enterprises are small loan amount provided, short grace period and short loan repayment time.
The study recommends that there was a need for the government to set a policy regulating the business environment so that entrepreneur will be able to obtain higher returns, provide an environment of lowering interest rates and softening conditions of
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accessing finance from various sources of finance. In additional financial institutions should open more branches especially in remote and rural areas where the majority of the Tanzanian are found. By so doing, more needy Tanzanians will be given funds to establish businesses. This will create more job opportunities that provide incomes to individuals. |
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