The Contribution of Microfinance Institution Services in the Development of Small and Medium Enterprises:  Evidence from Ilala City, Tanzania

Proceedings of The 10th International Conference on New Ideas in Management, Economics and Accounting

Year: 2022

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The Contribution of Microfinance Institution Services in the Development of Small and Medium Enterprises:  Evidence from Ilala City, Tanzania

Ulingeta Mbamba

 

ABSTRACT: 

The purpose of this study was to examine the contribution of microfinance institutions (MFIs) in the development of small and medium enterprises (SMEs) in Ilala City in Tanzania.  The study aimed to determine the influence of financial and non-financial services from MFIs vis-à-vis SME capital growth, income growth and employment creation.  The data on the identified variables were collected from primary sources (owners of the SMEs) using questionnaire and analyzed using MANOVA. The study found out that MFI services had positive influence on SME capital growth and income growth, while MFI services had positive but insignificant influence on the SME’s ability to create employment.  The study, therefore, recommends that public sector policy analysts and managers design specific policies to have effect on growth of SMEs.

keywords: Microfinance institutions, small and medium enterprises, MANOVA.