Bridging the SME Financing Gap in Tanzania: The Role of Microfinance Institutions

Alberto Gabriel Ndekwa,Romed Kavenuke,Mkanibwa Ngoboka,Ndawi Joseph,William Ayub Mng’ong’ose


It is well acknowledged in a number of literatures that SMEs play a great role in social economic development of any country in the world where Tanzania is inclusive. However, it is interesting to note that most of the SMEs could not survive in the first to third years of incubation due to several factors where capital stability and inability to access formal banking services are inclusive. MFIs services have been put in place to enable the SMEs in remote areas to access financial services for their survival. This study was designed to assess the role of MFIs on the financial services towards the survival of SMEs in Tanzania. Systematic random sampling method was used in a descriptive survey to pick a sampleof 213 SMEs respondents. Results indicated that MFIs pray a major role in improving capital structure, increasing credit facilities, provision of loan and in provision of training where the strength of these role is arranged in ascending order based on analysis done using descriptive mean. While MFIs is observed in this study to offer a strongest role in improving capital structure of SMEs, this study recommend that for SMEs to survival they have to join MFIs so that they can improve their business capital structure which will in turn increase their efficient in production and marketing of the products.