Business Administration

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    Assessment of factors affecting micro entrepreneurs in servicing their loan: A case of PRIDE
    (Mzumbe University, 2013) Bwire, Baraka
    This study assesses various factors affecting micro entrepreneurs in servicing their loan from microfinance institutions in Tanzania. Promotion for Rural Initiative and Development Enterprises (PRIDE) Tanzania, Kariakoo branch was the study area chosen for this study. Officials at PRIDE Kariakoo branch formed the unit of analysis and they were divided into three categories of head of departments, supervisors and operational staff. Another unit of analysis was PRIDE Kariakoo branch customer Despite growing in number of microfinance institutions, access to finance by micro entrepreneur is still a challenge as most of them lack credit history and holding defaulting history. This study then tries to dig into details to understand what other factors that affect micro entrepreneurs in servicing their loans; specifically the research also seek to examine the operating environment of micro entrepreneurs, to assess loan usage and its impact on micro entrepreneurs business, to assess viability of the loan write up (identify gap between write ups and implementation) and assessing the effectiveness of the Business Development Services (BDS) provided to the clients before and after accessing the loan. The research used both primary and secondary data sources. For primary data, observation, questionnaire and interview were used to collect data.The study found that lack of good business infrastructure, poor record keeping, poor and misuse of loan received, PRIDE direct microfinance scheme in place, high interest rates, poor capital base and low operating capital, withdrawing from the business and lack of saving culture are some of the factors affecting MSME’s to service their loan from microfinance institutions. The research suggests a need for a serious turnaround from Direct Microfinance Scheme to Triangular Credit Extension scheme and a need for all stakeholders to join hands for developing a sound business infrastructure for MSME’s growth and development in the country. The researcher really hopes that output from this study will be of practical use to PRIDE.
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    Factors affecting non-performing loans in banking industry: A case of KCB Bank (Tanzania) limited Morogoro and Msimbazi branches
    (Mzumbe University, 2013) Msigwa, Carlo
    The problem of non-performing loans is seen as a burden on any country’s economy or financial institution and putting downward pressure on its growth. This is because the role of banks as financial intermediaries does not function properly due to the problem of non-performing loans (NPLs). The general objective of the study was to examine the factors affecting non-performing loans in KCB Bank (Tanzania) Limited; Morogoro and Msimbazi branches. Cross-sectional research design was used in the methodology. The sample size of 46 respondents (i.e. KCB workers and customers) was used. Data collected were analysed and processed by Statistical Package for Social Science (SPSS) computer software. The findings showed that, diversion of funds for unnecessary expansion of business and speculations leading to investing in high risk assets to earn high income (70%) and legal environment which reflects the availability or non availability of foreclosure laws and ownership rights for both domestic and foreign investors (75%) have been factors influencing NPLs. However, Morogoro branch had higher NPLs ranging from 8% to 6.5% compared to Msimbazi branch which had NPLs ranging from 7.5% to 6.2% as reported by 90% and 85% of respondents respectively. Yet, enhancing training and development options to prevent the failure (85%), introducing and implementing of an aggressive debt collection policy (90%) have been the attempts made to alleviate NPLs. The results indicate that banks need to put emphasis on reserving adequate amount of capital to improve their risk position. The research adds to the argument for enhancing training and development options to prevent the failure in assessing the capabilities of the individuals or entities to generate the interests in their loans in order to alleviate NPLs to the minimum required for the bank to perform.