THE EFFECTS OF MICROFINANCE ON FINANCIAL PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN TANZANIA: A CASE STUDY OF ILALA MUNICIPALITY

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Halipha Iddy Mnunka
Dr. Benard Nyakweba Oyagi

Abstract

In the world, countries have exposed great consideration on creating and facilitating favorable environment for encouraging development of Small and Medium Enterprises (SME’s) in order to boost their economy for the purpose of reducing poverty within their country. The study aims to establish the influence of provision of credit facilities on financial performance, to determine the effect of savings mobilization on financial performance of SMEs in Ilala Municipal. The study used descriptive research design, the study used Slovene's Formula to obtain sample size of 356 SMEs from the target population of 3215 SMEs, structured questionnaire was used to collect primary data, data was analyzed using descriptive statistics included measures of central tendencies (mean) and measures of dispersion (standard deviation, the finding of the study concluded that microfinance (Credit facilities, saving mobilization) have positive effects to the financial performance of SMEs and recommended that microfinance institutions should consider more entrepreneurs training to entrepreneurs who do not have entrepreneurial skills.

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