Impact of Microfinance Institutions in Development of Textile Industries in Tanzania: The Case of PRIDE Tanzania

The main objective of this study was to assess the role of financial institutions in the development of Small and Medium Enterprises (SMEs) in the garment sector and propose strategies for enhancing accessibility of micro financing to SMEs in the textile industry. The target population for the study consisted the garment sector SMEs particularly women in the Batik business within the study area. The sampling procedure utilised was the purposive sampling based on one stage where respondents were chosen through a random sampling technique. The sample comprised of 85 SMEs in the garment sector and Managers from PRIDE Tanzania. Qualitative and quantitative primary data were obtained through questionnaires and interviews. Quantitative data analysis used descriptive statistical procedures using frequency distribution. Secondary information was also used as received from various microfinance internet-based databases and available literature sources. Findings depict that the MFI plays a major role in development of SMEs in the Textile Industry with notable accessibility by the youth and women entrepreneurs. Also the researcher concludes that, PRIDE is generally fair when providing funding, however the interest rates charged by the institution was found to be a deterrent to potential SME clients and a significant factor in credit repayment defaults by subscribing low-income earners and micro-business owners in the garment sub-industry. In view of the observation made during the study, the researcher recommends that PRIDE TANZANIA should review its interest rate policy and propose for more affordable and sustainable rates for small scale business owners.

Level dc:type.qualificationlevel

masters

Grantor dc:publisher.institution

The Open University of Tanzania

Year dc:date.issued

2013

Author dc:creator

• Manongi, Neema

• 658 Gerneral management

Language dc:language

en