Small And Medium Size Enterprise Financing In Tanzania

There is currently a large interest in understanding firms'access to finance and the financing of small and medium sized enterprises (SMEs) in particular. However, the financing patterns of SMEs across countries is not well understood; for example, little is known about the relative importance of equity, debt, and inter-firm financing for SMEs across countries. This paper focus on the SME financing in Tanzania. During the nineteenth and early twentieth SME plays a very important part in improving the country economy and creation of employment to the large number of the civilian, but in current years SME facing a major challenge of funds to assist its activities. It has been find that an impressive variety of local financial institutions emerged to supply the needs of SMEs wherever there was sufficient demand for their services. Although these intermediaries had significant weaknesses, they were able to tap into local information networks and so extend credit to firms that were too young or small to secure funds from large regional or national institutions. In addition, by raising the return to savings for local households, they helped to mobilize significant new resources for economic development.