ABSTRACT The role of the Small and Medium Enterprises (SMEs) as a catalyst for economic growth and development has been well documented in the economic literature and it is recognized that fiscal and monetary policies played a great role to robust such economies in most countries. SMEs depend on features such taxations, spending decision of the government, optimal use of money, level of employment and interest prevailing in the economy. In Tanzania, SMEs enjoy a competitive advantage over large enterprises in servicing dispersed local markets. It presumed to play the leading role in developing the sector on their ability to identify and exploit opportunities for the sector’s future rests. The paper based on secondary data with a review on the fiscal and monetary factors in Tanzania that have repercussions on SMEs development as to recount the way forward in improving SMEs development in the economy. The review reveal that fiscal policy in Tanzania is pro-cyclical due to rise in inflation rates that crowd out SMEs investment, it realized that offsetting the fiscal stimulus is necessary to control price because pro-cyclical behavior of fiscal policy affects SMEs development. From the review it observed that although main challenge is fiscal and monetary policies as macroeconomic factors but other challenges are historical determinants, business environments and growth opportunities still challenges SMEs development. Key Words: Fiscal and Monetary Policies; Small and Medium Enterprises Introduction
See Full PDF See Full PDFThe growth of Small and Medium Enterprises (SMEs) globally is dependent upon a conducive business environment. However, in Tanzania, SMEs face several constraints such as limited finances, poor market accessibility, low entrepreneurial knowledge and bureaucracy which hinders their growth. This paper aims to assess the factors impeding the growth of SMEs in Tanzania. Factors such as a lack of business training, capital constraints, a lack of finance, poor infrastructure, a lack of collateral, poor production, poor technologies, tight regulations, corruption, poor market accessibility, the motivation of the business owners, limited access to information, a lack of human competencies and inadequate raw materials were measured. A mixed-method approach was used in this study, inclusive of content analysis to extract the constraints from the 21 items of literature in Tanzania. Thereafter, a quantitative approach was applied where descriptive statistics were used to determine the frequency and percentage of the factors in order to extract the most significant variables affecting SME growth in Tanzania. The findings reveal that Tanzanian SME growth is mostly impacted by financial constraints, capital constraints, poor technology and tight regulations. The study recommends that financial assistance through lowering the interest rates and simplifying the borrowing procedures must be given to SMEs to enable them to avail the necessary finance and capital for their business Also the government must support SMEs by simplifying the regulations for SMEs such as levying taxes. Business training must be provided to the SMEs by government organisation such as the Small Industries Development Organisation (SIDO) to facilitate business knowledge.
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Iv ABSTRACT This study was conceived to investigate the influence of government policy on Small Medium Enterprises’ (SMEs) growth in Zambia. Micro, small and medium enterprises as the most common form of enterprise in many countries are very significant for the development of their market economies. They are the main creators of the new working places and they present a vital core of the market economy. The experiences of well developed countries show that the sector of micro, small, medium enterprises is a basic link to the growth and development of their public economy .policy making in the entrepreneurship field is complex and messy. Many areas of government policy affect levels of entrepreneurial activity. The mix of policy options will depend on a number of factors, including the prevailing attitudes of the population towards entrepreneurship, the structure of labor force, the size and role of Government, the prevalence of existing level of entrepreneurial activity and the existing MSMEs. It is common place for Governments to have policies to encourage the growth of local micro, small, medium enterprises as they can help to directly alleviate poverty by increasing income levels and creating jobs. This paper evaluates the government policies with respect to the MSMEs, and the performance of these enterprises in relation to these policies and assistance. In particular the article concentrates on the growth of entrepreneurship within the micro, small and medium_ sized enterprises in Zambia. In addition, it also considers the contribution of MSMEs towards the country employment generation. The global market has changed considerably as also the activities of MSMEs.Today, for business to survive, dynamism and entrepreneurship must exist in its fullest degree. We found in the records of MSMEs development that, those countries have succeeded in achieving higher growth of MSMEs, who have given much more emphases on Entrepreneurship Development program.
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… Conference on SMEs and International Trade, …
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Sahel Analyst: Journal of Management Sciences, University of Maiduguri
The effect of fiscal policy on total demand for goods and services at any particular income level depends on tax-transfer yields and purchases of goods and services. These amounts in turn result from a movement along given tax-transfer and expenditure schedules. Despite the emphasis placed on fiscal policy in the management of the economy, the SMEs sector inclusive, Nigerian economy is yet to come on the path of sound growth and development because of high tax and poor government expenditure, which in turn affect low output and productivity in the SMEs sector and its contribution to the economy (GDP). The main objective of this study is to examine the effect of fiscal policy on the growth of small and medium enterprises in Nigeria from 1999 to 2016. The research design adopted for this study was the ex post facto research design, and the Error Correction Model (ECM) was used to analyse the time series data, whereas the Johansen co-integration approach was employed to test for the long-run relationship among the series. The findings reveal that there is no significant effect between tax rate (TAR) and growth of SMEs in Nigeria, but there is a significant effect between government expenditure (GEXP) and growth of SMEs in Nigeria. Therefore, the study recommends that government has to be sensitive to the variables in the tax environment so as to enable the SMEs sector cope with the ever-changing dynamics of the SMEs environment. Also, government should maintain its capital expenditure, as this will continue to have a multiplier effect on the growth of SMEs activities and enhance the overall economic growth in Nigeria.
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The research was to assess the effectiveness of the strategies used by Dodoma City Council in developing SMEs. The city was chosen due to the fact that it comprises both rural and urban characteristics. The research uses cross-sectional research design, where data is collected once and in large subjects in such a way that various issues are studied, like the behaviours and altitudes of the respondents. Both primary and secondary data were collected using structured questionnaires, interviews, and focus group discussions, while in data analysis, a combination of both qualitative and quantitative methods was used. The study found that the strategies to develop SMEs are effective but have only been partially implemented. Regardless of the low entrepreneurial knowledge that small business practitioners have, SMEs development programs in Tanzania are not effectively implemented. The government formulates programs but leaves them partly implemented and partly unimplemented. It is found that LGAs link SMEs to financial institutions but leave them with no training regarding fund management, which results in many SMEs falling into bankruptcy and causing non-performing loans to financial institutions that end in economic failure. The findings will be used by the local government authorities to widen the SMEs development programs and train the SMEs on SMEs' growth and development programs, something that was perceived to be done by the government, though it was left in between the implementation process.
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RESEARCH REVIEW International Journal of Multidisciplinary
Micro, SMEs are seen as a motivating force for the promotion of an economy and they contribute enormously to the economic growth of the organization particularly in Tanzania. Due to the lack of understanding of financial management combined with the uncertainty of the business environment often leads Micro, Small and Medium Enterprises to serious problems concerning financial growth. The significant Objective of this study was to explore financial management practices and growth of Micro, SMEs of Tanzania. This research was guided by the following objectives: financial innovations, investing activities, risk management practices and working capital management. Since the Micro, SME population is quite high, the target population for this study was estimated at over 400 management staff from selected Micro, SMEs in Dar es Salaam. The methodology used was simple random sampling technique to select the sample of 85 respondents. Primary data was collected using a self-administered questionnaire. Content analysis was used to analyze qualitative data. The model applied to determine the relative importance of each of the four variables with respect to the growth of Micro, SMEs was multivariate regression model. The study discovered that financial innovations influence the growth of Micro, SMEs of Tanzania to abundant scope. The study recognized that the reason for innovation in an organization growth is to make profit for particular company. Similarly, Investment described as the redistribution of resources from being consumed today to generating benefits in the future. Improvement of an effective business support system is also an important condition for the success of investment capacity building. Respondents strongly agreed that investing requires business support organizations which have a demonstrated capability of penetrating the Micro, SMEs organization. The study concludes that financial innovations influence the growth of Micro, SMEs of Tanzania to a great scope and that the aim for innovation in an enterprise is to make a profit. Consequently, Risk management has become fragment of a strategic constituent of the modern organization‟s survival and development. Finally, statistical significance between working capital and organization growth, the study found that there is essential need for a compromise between receivables and holding inventory when the organization is to achieve the required profits. Owner/managers of micro, SMEs are recommended by the study that, they should embrace financial innovations in order to produce long term stability and for the firm to have competences. The study also recommends that it is important for Micro, SMEs to invest so that investments can grow to competition against inflation and future reservations. Managers should increase an effective business support system as a key condition for the success of investment capacity building. The study found that there is a need of looking the challenges facing Micro, SMEs of Tanzania.
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