Abstract
This paper aims to contribute to the understanding of the demographic factors that influence the growth of Small and Medium-sized enterprises (SMEs) in Tanzania. A survey method was used to gather data from 300 small business owners and managers located in selected cities in Tanzania. Multiple regression analysis was conducted to analyse the influence of owner-manager demographic factors on the growth of SMEs. Three indicators for growth namely employment, sales and assets were used to measure growth. The results suggests that workshop, vocational training, industrial and managerial experience and family background do influence the growth of SMEs. Entrepreneurial experience and level education successfully completed by the owner-manager are not important in explaining SMEs growth. The results suggest that policy measures that promote workshops, role models and previous experiences may have the greatest impact in terms of helping to facilitate SMEs growth in Tanzania. However, the results are limited to a single survey and the data was collected from only one sector (furniture sector) in Tanzania. Replication of this study using larger samples to different sectors and a broader geographic base is suggested for cross validation purposes.
Highlights
It has been widely recognized that there is a positive correlation between Small and medium-sized enterprises (SMEs) and economic growth (Urban & Naidoo, 2012; Batsakis, 2014)
Since this study aimed to examine the demographic factors that influence the growth of SMEs, the respondents selected had to be the owner-managers of a firm
300 entrepreneurs within the furniture sector in four different regions in Tanzania participated in the fieldwork study
Summary
It has been widely recognized that there is a positive correlation between Small and medium-sized enterprises (SMEs) and economic growth (Urban & Naidoo, 2012; Batsakis, 2014). Tanzania has recognized the importance of SMEs for economic development and poverty alleviation Due to this recognition, the Tanzanian government has introduced various policies and programmes intended to support the development of SMEs. despite the existence of various programmes, only a few SMEs have managed to grow and expand while the majority have declined or remained stagnant. Despite the existence of various programmes, only a few SMEs have managed to grow and expand while the majority have declined or remained stagnant In response to this problem various researches connected to the growth of SMEs have been conducted in Tanzania. These include the role of credit (Kuzilwa, 2005), the macroeconomic environment (Trulsson, 2000), institutional barriers (Nkya, 2003), sources of finance (Bagachwa, Harris, & Tinios, 1993; Verspreet & Berlange, 1998; Naliotela & Elias, 2003), firm characteristics (Satta, 2003), strategy (Mbwambo, 2005), efficiency (Bagachwa & Mbele, 1995; Wangwe, Semboja, & Nyanga, 1998), firm size, investment in information technology (Admassie, 2002) and capital (Kimeme, 2005)
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