Challenges Facing Micro and Small Business Growth in Tanzania: A Case of Mbalizi Town Council

Abstract

Micro-enterprises are crucial in the economic landscape of many less-developed African countries, including Tanzania. Despite micro-enterprises significance, these enterprises often face challenges that hinder their growth. This paper synthesizes findings from existing literature. A quantitative study was conducted in Mbalizi Town Council, Mbeya region, Tanzania, to explore micro-enterprise growth challenges. The study's sample size was 285 micro-enterprises in Mbalizi Town. Data were analyzed using descriptive and multiple regression analysis. The paper's importance includes the development of sustainable micro-enterprises to support the contribution to the economic development of Tanzania. The study findings revealed that factors such as; lack of business skills, inadequate infrastructure, regulatory obstacles, and limited access to finance are significant challenges faced by micro-enterprises in the region. Furthermore, demographic factors such as; age, gender, experience, and business ownership were found to have no significant correlation with micro-enterprise growth. The study found one behavior in buyers buying goods or services with the principle of who-know-who or relative or same-tribe domination. The paper concludes by offering recommendations for addressing these challenges, including enhanced training programs, improved access to finance, regulatory reforms, and investment in supportive infrastructure. Also, policymakers need to address the challenge of people segregating buying depending on tribalism. By implementing these recommendations, stakeholders can support the sustainable growth of micro-enterprises, thereby contributing to broader economic development in Tanzania.