Credit and Entrepreneurship Development: Case Studies of Entrepreneurs Receiving Credit from PRIDE, MEDA, CREW and SIDO in Tanzania
Eulalia I. Temba (Senior Lecturer, The Institute of Development Management, Mzumbe Tanzania - currently on Ph.D. studies at UDSM )
Download Article | Published On 01/01/2002

Abstract

This paper discusses some preliminary findings from a study of four case studies (4) elected from a survey done in three regions in Tanzania. The paper attempts to discuss the role of credit 10 the development of entrepreneurship. The survey was done in Tanga, Mbeya and Arusha regions. The cases are based on the justifications so far given for advancing micro loans to small-scale entrepreneurs.. These Justifications are economic development and growth, poverty alleviation and women empowerment. The last justification is not a concern in this chapter. In discussing the cases, various reasons for entrepreneurs to seek for credit are examined. The use of credit loans on performing different functions of small businesses is discussed using two successful case studies sampled from PRIDE and MEDA credit schemes in Arusha and Mbeya Regions respectfully. On the other hand, two unsuccessful case studies have also been drawn from CREW in Tanga region. The objective of making this simple comparison is to show how credit loans can contribute to entrepreneurship development; while it can at the same time be a problem to the borrowers. A cross case analysis is done basing on the differences and an assessment of the loans given. The analysis is further based on why entrepreneurs start businesses, the source of initial capital, and the role of credit loans on the development of their businesses, and performance indicators from the point of view of the owner managers. The conclusion is based on the two justifications for credit for small businesses so far developed from the role of micro finance and small-scale development theories. The case studies are also discussed basing on the assumptions that, credit loans can only promote entrepreneurship development 1f the borrowers demand the loans from their own felt needs; and second if they have a pre conceived business idea which they strive to attain using the credit loans.

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