Does Rural Micro Enterprises really grow? Evidence from Growth patterns of the Nonfarm Micro Manufacturing Enterprises in Rural Tanzania

Abstract

The question on whether micro enterprises grow or not have been a debate among scholars for so long. This study provides an important contribution to this dispute discussion. It sampled and assessed a total of 62 micro manufacturing enterprises in rural Tanzania`. Both primary and secondary were collected for analysis. This study applied trend analysis to examine growth patterns of the rural micro manufacturing enterprises. Sales, employment, value added and gross mixed income were the key variables to determine whether an enterprise grows or do not. Results shows that most of rural nonfarm micro manufacturing enterprises do not grow at expected rate with majority remaining at the same level of growth for so long. This study established that an increased sale has not been substantial and that the rural nonfarm micro manufacturing enterprises has continued to consist only owner. Value added and gross mixed income of the rural micro manufacturing enterprises is declining. The government need to review its policies relating to rural nonfarm sector by ensuring that there is appropriate and suitable institutional arrangement for support. Rural nonfarm micro manufacturing enterprises will be required to be more proactive and capitalize on available opportunities in Local Government Authorities such as the 4-4-2 program in order to cut the rising cost of doing business in rural areas.