n African Journal of Business and Economic Research - Barriers to SMEs development in the manufacturing sector : evidence from Tanzania

Volume 4, Issue 2_3
  • ISSN : 1750-4554
  • E-ISSN: 1750-4562


The study addresses the constraints faced by SMEs in Tanzania, a developing economy that has implemented economic and institutional reforms in the last two decades with a view to create an enabling business environment for private sector development. This paper also argues that there remains a wide gap in practice between policy reform measures aimed at creating a facilitating business environment for SMEs and the experiences of SMEs on the ground which are encountering hindrances than help in their growth. The evidence collected from 61 SMEs in food and wood manufacturing sectors indicates that 5ME development is constrained in terms of difficulty with finance, a weak and inadequate regulatory environment, as well as problems with interfim linkages and technology. The study concludes that providing support to SME activities and dismantling barriers in the institutional and policy environments will allow SMEs to play a leading role in Tanzania's pursuit for strong economic and industrial development.

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