Yohane Magembe
The contribution of Small and Medium Enterprises (SME) in economic development has been recognized worldwide. The main challenge of the sector to contribute fully is a limited access to finance. This study examined the factors influencing access to credit by SMEs operators. Since the study was explorative in nature it employed survey method of which the data were thought to meet descriptive and inferential analysis. Therefore the study intended to collect data through questionnaires to 300 SMEs owners in Dar es Salaam city in Tanzania. The results of descriptive analysis which were presented in percentages showed that the major challenges that lenders encounter when lending among SMEs include; high interest charged and collateral requirement as the decisive factor for loan approval. Furthermore the main reasons for bad loans among SMEs operators in the region are credit management, high interest rate, short term repayment and poor business skills. The logistic results indicated that business information is the critical factor that largely influences credit access by SMEs in the region. The government should strategically regulate the stringent conditions and requirements posed to SMEs operators while education should be offered to SMEs operators in the region to improve their business operations.
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