ARUSHA TECHINICAL COLLEGE(ATC)

PROGRAM : BACHELOR OF SCIENCE IN COMPUTER

SCIENCE
MODULE NAME : ENTREPRENEURSHIP
MODULE CODE : GSU 07114
MODULE INSTRUCTOR : DR. CRN CHARLES
TASK : INDIVIDUAL ASSIGMENT
NAME : FRANK B JOHN
ADMISSION NO : 23050513098
SIGNATURE : ……………...

QUESTIONS
USING SME’s POLICY OF TANZANIA
1. Write a brief but straight forward summary of key issues in the given policy using seven
paragraphs
2. Explain how the given policy is related to ;
A. Conceptualization of Entrepreneurship using six sentences.
B. Types of Entrepreneurship/ Entrepreneurs using six sentences
C. Business Opportunities in using six sentences
D. Business Development using six sentences

ANSWERS
1. Summary of Key Issues in SMEs Policy:
The Abreviation SMEs used to mean Micro, Small and Medium Enterprises. It covers
non-farm economic activities mainly manufacturing, mining, commerce and services. Commonly
yardstacks used to define SMEs are total number of employees, total investment and sales
turnover to define SMEs. For Micro Enterprise; total number of employees range 1-4. Capital
Investment of Up to 5 millions. For Small Enterprise; Total number of Employees ranges 5-49,
capital invested in machinery ranges above 5 to 200 million Shillings. For Medium
Enterprises,total employees number ranges 50-99 , capital invested ranges above 200 million to
800 million Tanzanian Shillings. For large enterprise; Number of employees ranges above 100
and Capital Invested exceeds 800 million Tanzanian Shillings.
The SMEs contributes to about third of the Growth Development Product (GDP) hence
playing a critical role in the Tanzania economy as follows. They create employment
opportunities to Tanzanians due to its labor-intensive nature. They are also effective in the
utilization of local resources using simple and affordable technology. Facilitates distribution of
economic activities within the economy as its technologies are easier to acquire, transfer and
adopt thus fostering equitable income distribution. Also, it serves as training ground for
entrepreneurship and managerial development and enable motivated individuals to find new
avenues for investment and expanding their operations.
There are different constraints faced by SMEs and the rationale of its Policies in Tanzania
which are;Heavy costs of compliance due to their size, Insufficient working premises and limited
access to finance. Business Development Sevices are underdevelopmed and not readily
available. SMEs operation lack information as well as appreciation for such services and can
hardly afford to pay for the services which makes them have low skills. Also supportive
institutions and associations are weak, fragmented and uncoordinated due to lack of clear
guidance and policy for SME development.
In the recognition of the Importance of SME sector, the Government efforts are for seen
by Development of Policies, Institutions and other initiatives or programs. Policies developed
including Tanzania Development Vision 2025 which seeks to transform Tanzania to semi
industrialized state. Other Policies are Sustainable Industrial Development Policy(SIDP of 1996-
2020) , the National Micro Finance Policy, Minerals Policy and other policies are National
Employment Policies, Gender and Women Development Policy. In the part of Institutions we
have Small Industries Development Organization – SIDO established in 1973 by Act of
Parliament to plan, coordinate, promote and offer every form of service to small Industries and
programs established include VETA.
The major ares of focus in SMEs includes, creation of the enabling business
environment, developing the infrastructure, strengthening financial and non-financial services
and also establishing and strengthening Institutions supportive to SME development. The
Strategies to counteract to these area of focus are Monitoring and Evaluation, Legal and
Regulatory Framework and support, Technology Adoption, Market Access, Capacity Building,
Access to Finance Strategies, Institutional Framework for SMEs Development, Rural
Industrialization, Cross cutting issues mainly environmental, Strategic Policy for gender,
disadvantaged groups and HIV/AIDS people
The policies encounters the different shortcoming which are ; Tanzania never had policy
focusing at the development of the SMEs sector hence resulting to number of gaps leading to
inability to address the core constraints inhibiting the growth of the sector and also making it
difficult to exploit the existing potentials for acceleration of SME development and limits its
ability to exploit the existing potential of SMEs to accelerate growth. Also SIDP address the
aspect of small Industries only which counter argues with SMEs sector which covers more
economic activities than manufacturing alone, hence the strategies and programs identified by
SIDP have lopsided effect as they neglected the greater part of SMEs activities in the areas of
commerce, mining and services.
SMEs policies made in Tanzania has different Visions, Missions which are to have
vibrant and dynamic SME sector that ensures effective utilization of available resources so as to
stimulate development and growth of SME activities through improved infrastructure, enhanced
service provision and creation of frameworks that helps to achieve competitiveness, fostering job
creation and income generation.
2. Relating the Policy to Entrepreneurship Concepts.
A. Conceptualization of Entrepreneurship:
The policy contrasts with the Entrepreneurship concept as it makes a conducive
environment to innovation, risk-taking, and business creation. The policy also admires the
presence of entrepreneurship as a push of economic development and job creation, providing
supporting systems for the small and medium entreprises.
B. Types of Entrepreneurship/Entrepreneurs:
Types of entrepreneurship such as social entrepreneurship, technological
entrepreneurship, and traditional entrepreneurship are vividly outlined in the SMEs Policies
recognizing the nature and diversity of different entrepreneurs, having different goals, different
motivation and even different models to operate their business .
C. Business Opportunities:
The policies of SMEs are mainly focusses on identifying and promoting business
opportunities so as to alleviate poverty and foster the Development of the small and medium
Enterprises. The includes making strategies for market analysis, supporting emerging industries,
and making initiatives to connect entrepreneurs with potential business opportunities such as
collaborators and potential supporters
D. Business Development:
The policy is vividly intertwined with the crucial role of business development by
offering support for SMEs to scale and expand their business and innovations. Implement and
putting forth strategies for internationalization, collaboration, and continuous improvement of the
enterprises fosters a sustainable and dynamic business ecosystem.

REFERENCE
1. Small and Medium Enterprise Development Policy by Ministry of Industry and Trade Dar es
Salaam, April 2003 pdf