An assessment of the implications of exchange rates fluctuation on the performance of SME’S in Tanzania: The case of electronic devices traders at Kariakoo, Dar es Salaam
Date
2020
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Mzumbe University
Abstract
The growth of Small and Medium Enterprises (SMEs) worldwide always depends on favourable business environment. Nevertheless, SMEs in Tanzania are threatened by a number of limitations that hinder their performance. One of the constraints is exchange rate fluctuation. This study had a main objective which was to assess the implications of exchange rate fluctuation on the performance of SME’s. In order to achieve the study objectives, assessment of the effects of foreign exchange rates fluctuations in the performance of SMEs as well as the effects of inflation rates fluctuations in the performances of SMEs was conducted. The study also assessed the mitigation strategies on inflation and exchange rate fluctuation. Descriptive research design was adopted in this study. The reason behind the selection of the design was its purpose and the nature of the variables at hand, which needed qualitative and quantitative analysis methods and the interpretation of views and perceptions. Findings from the study indicated the negative effect of exchange rate to business performance. Exchange rate was seen to impact many areas such as the importation of goods and the payment of trade creditors. The study concludes that, Unstable exchange rate has negative implication to the performance of SMEs in Tanzania. Depression of the value of currency which mainly occur in Tanzania and many developing country cause the decrease in purchasing power in importing product and also result in rise of product price in internal market. The study recommends to policy makers to make consideration on exchange rate dynamics when making monetary policy and fiscal policy.
Description
A dissertation submitted in partial fulfilment of the requirements for award of the degree of Master of Business Administration (MBA-CM) of Mzumbe University
Keywords
Inflation rates, Perfomance, Small and Medium Enterprises (SMEs)
Citation
APA