TITLE: EXAMINE THE ROLE OF GOVERNMENT IN PROMOTING SMALL SCALE

BUSINESS, IN TANZANIA, THE CASE STUDY IN BUKOBA

INTRODUCTION
This study it examines the role of government in promoting small scale business in Bukoba and
also it seeks to investigate the role of government in promoting small scale business country.
This work focuses on the background of the study, statement of the problem, objectives of study,
research questions, scope of the study, significance of the study, methods, literature review and
conceptual framework.
THE BACKGROUND TO THE STUDY
Many of Tanzanian especially youth are engaged in small business sectors, since it’s very
important sector in developing countries where the level of youth unemployment is rising
beyond control. The small-scale business generates employment opportunities per unit of capital
investment because they are generally more labor intensive which is more capital in nature.
Economic policies early 1980’s forced the majority of under employed people to use informal
sector activities as survival strategies, and also government responded by developing Structural
Adjustment Programmes.
In Bukoba is blessed with abundant resources where most of small business employ family
members to undertake business activities therefore family members earn their daily income and
hence lead to the improved life standards. There are large number of traders and their category
operating in Bukoba Municipality are wholesale business30, sub-whole business 230 and rental
business 1760. On the other hand, there are 211 different business operating as informal sector
STATEMENT OF THE PROBLEM
The small-scale business facing many problems on growth and developments of a certain
production despite in promoting of indigenous technology, employment generating activity and
bordering the production base of the economy, the impact has not been given adequate
recognition. The small-scale business in Bukoba have been restricted access to institutionalized
credit because banks see them as high-risk ventures due to the lack of capital and cash flow, also
facing challenges such as poor technologies tight regulation, poor market accessibility, limited
access to information.
Since there are government set up to prove incentives and grants to small scale enterprises.
Therefore, the researcher intends to find out why small-scale business does not thieve in Bukoba.
Also, to investigate whether the growth of the economic activity in the state where these
government agencies actually providing it only in paper work and not practically.
The sector still faces these challenges and problems which hinders the development of small-
scale business in Tanzania. Due to this reason, it drives the researcher to do this study to fill
those gaps which are not met by other previous researchers as we see the sector still faces those
challenges. This study concentrates on assessing the role of the government in promoting the
development of Small scale business.
PURPOSE OF THE STUDY
small scale business has seen a rapid evolution in the past decade and has introduced economic
development and improvement in the society. The purpose of this study is to aid decision making
in determing if increase government expenditure in small scale business might minimize
challenges that facing small scale business and led to the improvement. To provide data that
showing the role of government in this sector.

OBJECTIVE/RESEARCH QUESTION/HYPOTHESIS
Main objective of this study; is to evaluate the impact and role of government in the promoting
the small-scale business in Tanzania.
Specific objectives are;
 To identify the source of funds to the activities of the small-scale business.
 To evaluate the marketing challenges facing small business.
 To find out the extent of government involvement in promoting the activities of the
businesses and the challenges.
Research question;
1. What are the challenges facing small scale business which hinders the development of the
sector
2. What are obstacles facing government facing in implementing the development and
sustainability of small-scale business sectors in Tanzania.
3. What effort the government has taken in promoting the development and sustainability of
small-scale business.
Hypothesis of this study according to the questions a rising can be either;
ALLTERNATIVE HYPOTHESIS
 There is role of Government in promoting small -scale business.
NULL HYPOTHESIS
 There is no role government in promoting small scale business

JUSTIFICATION OF THE STUDY

As a student of Ardhi University that live in Tanzania, I am exposed to both the possibilities and
the challenges associated with the sector. I have observed that development of small-scale
business in Tanzania is beneficial to the country, however the sector has had a bad reputation
when it comes to repaying their investors. Being a student of finance has made me curious
regarding what wrong is being done, which has rendered small scale business sector unattractive
for investors, so that recommendations can be made regarding the same.
The result of this project may also be beneficial to other assumed sector, by potentially
heightening the awareness for the possibility of challenges in the sector where this is not
considered. This awareness led to the development of small scale business through the creation
or improvement of policies , procedures and training in the sector. The project will address these
gaps by discovering the personal perceptions and safety concern of employees in assumed low-
risk environments, which will add to the existing theoretical knowledge regarding sectors.
SCOPE OF THE STUDY
The study conducted in a single region bukoba-Tanzania and it focuses its attention to the
government to support the small-scale business in Tanzania. It causes various policy guidelines,
direct and indirect financial assistance and other programs and initiatives designed to promote
this sector. The data collection will be conducted to 10% of the total population in small scale
business in Bukoba through questioner. The research study it will conducted to offer relevant
information about government expenditure to the small scale business. Also the study is designed
to understand the important of small scale business sector in the economy.
SIGNIFICANCE OF THE STUDY
The study provide significance or purpose of study to the society is to analyze the role of
Government to the small -scale business, on how the Government facilitate the development and
growth of small-scale business. The study will help the government to solve problem of the
bottlenecks that prohibit effective implementation of small-scale business development policy,
the research study will help the stakeholders to realize their roles and responsibilities. Also,
would be beneficial to the small-scale business employee, employer, and self-employee because
they will know the negative effects of delaying of government expenditure in their sector. In this
study the small-scale business can be aware on things that government can do to them.
This research would be help to the society they can know the effects, challenges, and strategies
of small-scale business and also the benefit of government expenditure and intervention to the
certain sector, this can help to prevent failure of other sectors. Additionally, the research would
be beneficially to the future researcher because they can get some information that might needed
in their research and some of their question may possibly answered by this research.
LIMITATIONS AND DELIMITATIONS
The study normally carried out with some attendant limitation in this particular study. Firstly, the
study will only conduct in Bukoba region, and will not examined regional variations in Tanzania.
Secondly, the study is limited to the assessment of promotion strategy on small scale business.
Thirdly, to collect scientific data in the production of quality reports some sampling techniques
like questioner will displayed or not correct answered by the respondents. Fourthly, time of
survey will be limited in terms of data collection. All sampled population could not meet all
needed information within the stipulated period. Fifthly, inaccessibility of records from funding
institution, like banks and government agencies.
Delimitation of the study is conduct in a single region because the study is the case study and not
a surveys study this helps the researcher to manage the study easily for intensive study. In the
case of data availability, the researcher will collect data from well documented literatures which
provide relevant information. Those respondents who will not provide their true opinions during
the interviews because they regarded some of the questions as sensitive, this group are regarded
to be small and will not affect the overall results and conclusions.

THE DESIGN-METHODS AND PROCEDURES

 Sampling
This study will be conducted through simple random sampling technique because there is large
population of entrepreneurs on which each individual is chosen randomly and entirely by chance
such that each individual has an equal chance of been chosen and judgmental technique will be
used at the ministry of industry and trade in order to obtain views from different personnel of the
ministry specifically from SME department. The sample size of the study it will include 90
respondents, 10 respondents as key informants from the small-scale business department under
the ministry of industry and trade, 80 respondents who own or operate small scale enterprises in
bukoba municipal. The respondents comprise male and female of the age ranging 20 to 60 years.
 Instrumentation
In this study, the researcher will be using modified research questionnaire. This questioner will
be used to measure the role of government in promoting small scale business. The firstly part of
questioner for household listing in bukoba, secondly a main questionnaire that will applies to
selecting household members who owning and running small enterprise during the time of
survey, thirdly a special questionnaire for closed small scale business two years prior to the
survey and that did not own and run another small enterprise during the time of the survey.
 Data collection
In order to accomplish this study successfully, different data collection techniques may be used
include questionnaires and interview in order to collect primary data. Documents such as
different articles, journals, books and report such as national baseline survey report for small and
medium enterprises in Tanzania (2012) used to collect secondary data.
For primary data collection I will use questionnaires were administered to specific entrepreneurs.
20 structured and unstructured questionnaires were used to acquire reliable information. This
method enabled the researcher to standardize the study.
 Data analysis
Both qualitative and quantitative analysis techniques will be used. The better understanding of
business environment under the study demands the extensive use of qualitative techniques. The
nature of the research questions demands for a quantitative approach to the study. Qualitative
information in this research will be done by using the descriptive statistical analysis that
generated the information presented in form of tables for simplified understanding. Basically, the
quantitative method used a simple linear regression method to which the intention of use is to
examine the relationship between the independent variables to the dependent variable.
LITERATURE REVIEW
according to the investment banking for SMEs the business for sale and investment opportunities
in bukoba it less compares to the other country. McMahon ((1993) summarized a common view
that, small firms are identified by their inherent characteristics. Different country use distinctive
measures of the size of small scale business depend on there level of development. In Tanzania
common measure is to take total number employees, total investment and sales turnover. The
government would wish to expand both the physical infrastructures for the small entrepreneurs
and all the support services such as business development services and institutional support
framework which would enable businesses to make the most of their opportunities.
There is various theory review which will describe this study such as theories of entrepreneur
review by (Shane and Venkataraman, 2000), like motivational theory McClelland (1961)
describes a Motivation theory to also known as Achievement Motivation or theory of High
Achievement. McClelland identified two characteristics of entrepreneurship also there is
economic displacement theory This theory was introduced by Mark Casson (1982), It is mainly
concerned with the economic variation of recession and depression. Job loss, capital shrinkage,
or simply “bad times” can create the foundation for entrepreneurial pursuits, just as it can affect
venture development and reduction.
GOVERMENT CONCEPTUAL FRAMEWORK
GOVERNMENT
 Supportive government
policies
 Policy implementation
 Government funding
 Physical infrastructure

SMALL SCALE BUSINESS ECONOMIC DEVELOPMENT

 Start Up Motive  Job creation

 Creativity and  Development of many
innovativeness small business
 Development of small-  Wealth creations
scale business  Business development
services
REFERENCES
A.K.M. Helal uz Zaman and Md. Jahirul Islam (2011), Small and Medium Enterprises
Development in Bangladesh: Problems and Prospects, ASA University Review, Vol. 5 No. 1
Dalu, R.S. and Deshmukh, S.G. (2001), ‘‘SWOT analysis of small and medium scale industry: a
case study’’, Productivity, Vol. 42 No. 2, pp. 201-9
Emmanuel O. Oni & Daniya A. A. (2012), Development of Small and Medium Scale
Enterprises: The role of Government and other Financial Institutions, Arabian Journal of
Business and Management Review (OMAN Chapter) Vol. 1, No.7
Kuzilwa, J (2005) “The role of credit for small business success: A study of the national
entrpreneurship development fund in Tanzania”. The journal of entrepreneurship, 14,2. Sage
Publications.
Maliyamkono T.L and Bagachwa M.S.D (1990) “The second economy in Tanzania’’ James
Curry, London.
URT, Ministry of trade and industry, National baseline survey report (2012), Micro, Small and
Medium enterprises in Tanzania.

APPENDICES

TO THE HEADS OF DEPARTMENT, MANAGEMENT AND OTHERS A

QUESTIONNAIRE TO BE PROVIDED TO THE RELEVANT EMPLOYEES

Dear respondents I am a student from ARDHI University undertaking

practically training in ministry of financing and accounting. I kindly requesting you to assist me
to facilitate the completion of my research work which is prerequisite for partial fulfillment of
my course. Please respond to the questionnaire form which is attached here. I will be grateful if
you assist me.
 APPENDIX I
QUESTIONS TO STAFF OF MINISTRY OF INDUSTRY AND TRADE (SMALL SCALE
DEPARTMENT)
Personal detail:
Sex………………………………………….
Age………………………………………….
Job designation…………………………………………………….
QUESTIONS:
1: What do you know about small scale business sector development in Tanzania?
………………………………………………………………………………
2: What measures have been taken by small scale business department in promoting the growth
and sustainability of Small scale business sector? .....................................
3: 6. To what extent the following factors are challenges to the development of Small scale
businees sector
Put a number in the bracket if 5-SRONGLY AGREE, 4-AGREE, 3-NEUTRAL, 2-DISAGREE,
1-AGREE
i. Lack of fund [ ]
ii. Poor management [ ]
iii. High interest loan [ ]
iv. Lack of adequate formal education and alternative payable employment [ ]
v. Taxation [ ]
4: Apart from above challenges are there any other challenges the government faces in
promoting the growth and sustainability of Small scale business? If yes please mention
them…………………………..
5: What is your suggestion to the government toward improving the growth and sustainability of
sme sector?............................................................
 APPENDIX II
QUESTIONS TO SMALL SCALE BUSINESS
Personal detail:
Sex………………………………………….
Age………………………………………….
Job designation…………………………………………………….
QUESTION:
1: What is the nature of the business you conduct? .................................
2: How many employees do you have in your business?
 Below 5 employees
 Between 5- 15 employees [ ]
 Between 15-30employees
3: What are the obstacles facing your business? Please mention them if any…………….
…………………………………………………………………………………………….
4: Are you aware with Tanzania SME development policy? Please tick in the box Yes [ ] No
[ ]
5: Does the government in any way assist you in performance of your business? Yes [ ] No
[ ] 8.
6: If the answer is Yes in question number FIVE above explain
how? ........................................................................ ..
……………………………………………………………………………
7: If the answer is No in question number eight above explain how? .......................
………………………………………………………………………………………………………
……………………..