African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4138

Article in Press


Nassoro Gassiah1*and Jaraj Kikula2

  •  Received: 11 August 2021
  •  Accepted: 27 September 2021
Commercial banks in developing economies plays an important role in promoting the growth of SMEs through the loan provided since they create conducive environment for their growth and success. The study focused on investigating the challenges SMEs faces in acquiring loans from commercial banks. The study used 120 respondents who were purposively and randomly selected. Both primary and secondary data were used. Data were analyzed descriptively and presented in tables, percentages, pie charts and tabulation to show differences in frequencies. Statistical Package for Social Sciences (SPSS) version 20.0 was used in coding, data entry and analysis. The study found that high interest rates, lack of collateral, short repayment period, lack of loan information, lack of integrity of bank officers and lack of innovations were indicated to be major challenges/difficulties which SMEs face in accessing credit facilities from commercial banks in Morogoro municipality. The study findings generally revealed that SMEs are facing challenges in accessing credit facilities in the Morogoro Municipality; hence the researcher basing on the study findings concludes that SMEs in Tanzania are small because they prefer to get their start-up capital from personal savings, relatives and friends. Basing on the study findings researchers recommended that for bank to attract customers (SMEs) to borrow, they should reduce the interest rates charges. Also, commercial bank should adjust repayment period which would be flexible enough within the business operational cycle of different SMEs in the study area.

Keywords: Small and Medium Enterprises, Credit Facilities, Commercial Bank