Success and Usefulness of Business Development Services in Tanzania ' s SMEs Market

Abstract

The study examined the success and usefulness of successful provision of useful Business Development Services (BDS) in Tanzania ' s SME market. Specifically, the study examined the extent to which the demand side and supply side factors as well as government support influence the successful provision of BDS. A survey methodology was deployed in the conduct of this study. Using random sampling, 100 respondents were selected to take part in a questionnaire survey: 50 questionnaires were administered with Business Development Services Providers (BDSPs) and 50 questionnaires with Small and Medium Enterprises (SMEs). The selected enumeration areas (EAs) were all based in Dar es Salaam City ' s municipalities of Temeke, Kinondoni and Ilala. A response rate of 85 percent was obtained for the 100 self-administered questionnaires distributed, 48 percent for BDSPs and 37 percent for SMEs. The collected data were organised and summarised using the Statistical Package for Social Sciences (SPSS) which facilitated the computations of frequencies and percentages as well as actual analysis based on the research questions. The summarised data were then analysed through hypothesis testing using the t-test. The results show that the demand-driven factors, the supply side factors and government assistance have a significant bearing on the success and usefulness of BDSPs in the Tanzania ' s SME markets. On the basis of these findings, the study concludes that, successful and useful BDS in the Tanzania market require a good combination all the three positions. Therefore, it is recommended that BDSPs must provide services in are great demand by the SMEs, that is, taking cognisance of demand-driven factors, and must be creative and innovative enough to bring about the desired changes and provide solutions that will steer growth and development of the SME sector (that is on the supply side). Finally, the government should play its role to facilitate business formalisation and access to finance in addition to ensuring that the regulatory framework was fully functional and responsive to the needs of the SMEs.