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This study attempted to assess the factors that are affecting performance of small and
medium enterprises (SMEs) in Kilimanjaro region in Tanzania. The aim of this study is
to provide the knowledge to the people in the region on how they should start and
manage their SMEs by being aware with the factors affecting performance of SMEs
which in turn will help them to manage their business sustainably. The factors tested
were: Demographic characteristics (age, sex, and education level of SMEs owners and
managers); Business characteristics (age of SMEs); Capital structure (source of initial
capital, and capital size); Legal structure (means of operating SMEs); the Marketing
strategy used by the enterprise to increase sales revenue and the Enterprise management.
The study was conducted in Moshi urban, Moshi Rural, Hai, Siha, Same and Mwanga
towns in Kilimanjaro region. The study used the cross sectional study design in which
data of 200 SMEs owners, and managers from all Moshi urban, Moshi Rural, Hai, Siha,
Same and Mwanga towns was collected only once. Both descriptive and empirical
methods were applied during the study. The regression results shown that, the most
significant factors affecting the performance of SMEs determined by income in the
study area were: Demographic characteristics (age and education level of SMEs owners
and managers), Business characteristics (age of SMEs), Capital structure (source of
initial capital, and capital size), and the Marketing strategy. Sex and Legal structure
(enterprise management) did not significantly contributed to the SMEs performance in
this study.
There is a need for policy makers to make sure that education is given to the SMEs
owners, managers and the employees together, with supporting them, if possible there is
a need of having curriculum in primary and secondary schools by making business and
entrepreneurship subjects as compulsory subjects, this will help to equip learners with
appropriate business and entrepreneurial knowledge and skills which will encourage
them to start and manage business successful. There is also, a need for the government
to make sure that, businessmen and women are enabled to have access to loans (credits)
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with reasonable conditions from banks and other financial intermediaries for expanding
their businesses; also soft loans should be provided to those who want to start new
businesses. There is also, a need to put more emphasis on how to encourage women to
engage in SMEs business and lastly there is a need to make sure that education on
saving behavior is encouraged among the people in the study area, this is because in this
research most of the businessmen/women started their businesses from personal savings
as their source of initial capital. |
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