Sources of Entrepreneurial Finance in Dodoma Municipal, Tanzania

Abstract

Small businesses irrefutably remain critical to the development of any country's economy as they are an exceptional, source of workgroup, help in expansion of local know-how, and develop originalfinanciers. A crucial component in the growth of the SME sector is access to finance, particularly to bank financing, given the relative importance of the banking sector in serving this segment. Since failure of people of Tanzania to get seed capital severely affects the community livelihood and that SMEs have been proved to alleviate poverty. The main purpose of the study is to evaluate the entrepreneurial finance challenges and the extent of financing of SMEs within the Dodoma Municipal, taking cognizance of the role and contributions of Financial Institutions in Tanzania. The study purposively sampled 100 respondents out of which 80 respondents were drawn from 80 SMEs and 20 respondents from lecturers belonging to [5] high learning institutions and [15] funding institutions respectively. The study further revealed that high interest rates; lack of finances and unfavorable tax charges as major constraints to the growth of SMEs. The major challenge could be interpreted to mean lack of entrepreneurial finance.