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Impact of Loan Provided by BRAC Microfinance on SME’s Improvement in Zanzibar

Received: 13 December 2021     Accepted: 4 January 2022     Published: 12 January 2022
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Abstract

The main concern of this paper is to examine the impact of loan on the improvement of Small medium enterprises (SMEs) in Zanzibar. The study concentrated on amount of loan provided by BRAC and cost of charged by BRAC to SME’s in Zanzibar. The study conducted in West “A” District-Unguja. The study has mainly employed quantitative research approach with appropriate method of analysis for this study. The sample size for this study consists of 112 SMEs members supported and registered by BRAC, and survey questionnaire was used as data collection instrument. To achieve a credible result for this study, a standard multiple regression was used to analyze and interprets the collected data from relevant respondents. The results revealed that two predictors (loan amount and cost of loan) had a significant effect or impact on the outcome variable (SME’s improvement). In other words, the results of predictor variables show that; loan (β = 0.076, t = 1.977, p < 0.05), cost of loan (β = -0.900, t = -23.322, p < 0.05). The study concluded that the amount of loan received by loan beneficiaries are no affordable and not sufficient to meet the expectations of loan beneficiaries. Also, unfavorable loan fees payment slows down the SMEs operation. Finally, the study recommended that micro finance institutions should prepare the seminar and trainings to be given to the entrepreneurs on the loan management.

Published in Science Journal of Business and Management (Volume 10, Issue 1)
DOI 10.11648/j.sjbm.20221001.11
Page(s) 1-6
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Loan Amount, Cost of Loan, SME’s Improvement, Standard Multiple Regression

References
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[3] Ally, H. A (2013) Contribution of Small Medium Enterprises to the Development.
[4] Honey, M. (1999) Asian industrial activities in Tanganyika. Tanzania notes and records 75: 55-69.
[5] Zanzibar Strategies for Growth and Reduction of Poverty 2010-2015 (ZAGRP II).
[6] Office of the Chief Government Statistician Zanzibar. ZANZIBAR STATISTICAL ABSTRACT 2020.
[7] RGoZ.(2006). ‘Zanzibar Small and Medium Enterprises (SME) Policy. MTIM. Zanzibar, Government Publishing Services.
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[9] Prahalad C. K. and Gary. H (1990). The Core Competence of the Corporation. University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship.
[10] Teece, D. J (2018) Bussness model and Dynamic capabilities Long Range Planning 51 (1), 40-49.
[11] Haji, S. I (2021) Assessment of Small and Medium Enterprises Sustainability, Case Urban West Region Unguja.
[12] Hussen, S., Wodajo, M. R., & Tasente, T. (2021). The role of microfinance in funding Small & Medium Enterprises: Harekello Town of Goro Dolla District in Focus, Ethiopia. Technium Social Sciences Journal, 17 (1).
[13] Makorerem. R. (2019) Global Business and Economics Research Journal ISSN: 2302-4593 Vol. 3 (4): 1–19 published at MzumbeUniversity on the role of microfinance in promoting small and medium enterprises (SMEs) in Tanzania.
[14] Mwandoro, A (2013) the role of microfinance institutions in the empowerment of Women in Mzumbe master of Business Administration Corporate Management.
[15] Salum, Z. (2014) The role of Microfinance on Entrepreneurs Development, Dissertation Submitted in Partial Fulfillment of the Requirements for Award of the Degree of Master of Science in Accounting and Finance (MSc-A&F) of Mzumbe University.
[16] Taiwo, J. N., Agwu, P., & Benson, K. (2016). The Role of Microfinance Institutions in Financing Small Businesses. Women & International Relations eJournal.
[17] Chukwuma, I. R. (2017). The Impacts of Credit on Small Business Financing in Florida (Doctoral dissertation, Walden University).
[18] Brienna, P. H. and Laura, B. (2015). Exploring social norms around cohabitation: The life course, individualization, and culture Introduction to Special Collection: “Focus on Partnerships: Discourses on cohabitation and marriage throughout Europe and Australia. Demographic Research: Volume 33, Article 25”.
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[20] Pallant, J. (2016). SPSS Survival Manual (6th ed.). New York, United States of America: McGraw-Hill.
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  • APA Style

    Ibrahim Awami Khamis, Abdalla Ussi Hamad. (2022). Impact of Loan Provided by BRAC Microfinance on SME’s Improvement in Zanzibar. Science Journal of Business and Management, 10(1), 1-6. https://doi.org/10.11648/j.sjbm.20221001.11

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    ACS Style

    Ibrahim Awami Khamis; Abdalla Ussi Hamad. Impact of Loan Provided by BRAC Microfinance on SME’s Improvement in Zanzibar. Sci. J. Bus. Manag. 2022, 10(1), 1-6. doi: 10.11648/j.sjbm.20221001.11

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    AMA Style

    Ibrahim Awami Khamis, Abdalla Ussi Hamad. Impact of Loan Provided by BRAC Microfinance on SME’s Improvement in Zanzibar. Sci J Bus Manag. 2022;10(1):1-6. doi: 10.11648/j.sjbm.20221001.11

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  • @article{10.11648/j.sjbm.20221001.11,
      author = {Ibrahim Awami Khamis and Abdalla Ussi Hamad},
      title = {Impact of Loan Provided by BRAC Microfinance on SME’s Improvement in Zanzibar},
      journal = {Science Journal of Business and Management},
      volume = {10},
      number = {1},
      pages = {1-6},
      doi = {10.11648/j.sjbm.20221001.11},
      url = {https://doi.org/10.11648/j.sjbm.20221001.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20221001.11},
      abstract = {The main concern of this paper is to examine the impact of loan on the improvement of Small medium enterprises (SMEs) in Zanzibar. The study concentrated on amount of loan provided by BRAC and cost of charged by BRAC to SME’s in Zanzibar. The study conducted in West “A” District-Unguja. The study has mainly employed quantitative research approach with appropriate method of analysis for this study. The sample size for this study consists of 112 SMEs members supported and registered by BRAC, and survey questionnaire was used as data collection instrument. To achieve a credible result for this study, a standard multiple regression was used to analyze and interprets the collected data from relevant respondents. The results revealed that two predictors (loan amount and cost of loan) had a significant effect or impact on the outcome variable (SME’s improvement). In other words, the results of predictor variables show that; loan (β = 0.076, t = 1.977, p < 0.05), cost of loan (β = -0.900, t = -23.322, p < 0.05). The study concluded that the amount of loan received by loan beneficiaries are no affordable and not sufficient to meet the expectations of loan beneficiaries. Also, unfavorable loan fees payment slows down the SMEs operation. Finally, the study recommended that micro finance institutions should prepare the seminar and trainings to be given to the entrepreneurs on the loan management.},
     year = {2022}
    }
    

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    T1  - Impact of Loan Provided by BRAC Microfinance on SME’s Improvement in Zanzibar
    AU  - Ibrahim Awami Khamis
    AU  - Abdalla Ussi Hamad
    Y1  - 2022/01/12
    PY  - 2022
    N1  - https://doi.org/10.11648/j.sjbm.20221001.11
    DO  - 10.11648/j.sjbm.20221001.11
    T2  - Science Journal of Business and Management
    JF  - Science Journal of Business and Management
    JO  - Science Journal of Business and Management
    SP  - 1
    EP  - 6
    PB  - Science Publishing Group
    SN  - 2331-0634
    UR  - https://doi.org/10.11648/j.sjbm.20221001.11
    AB  - The main concern of this paper is to examine the impact of loan on the improvement of Small medium enterprises (SMEs) in Zanzibar. The study concentrated on amount of loan provided by BRAC and cost of charged by BRAC to SME’s in Zanzibar. The study conducted in West “A” District-Unguja. The study has mainly employed quantitative research approach with appropriate method of analysis for this study. The sample size for this study consists of 112 SMEs members supported and registered by BRAC, and survey questionnaire was used as data collection instrument. To achieve a credible result for this study, a standard multiple regression was used to analyze and interprets the collected data from relevant respondents. The results revealed that two predictors (loan amount and cost of loan) had a significant effect or impact on the outcome variable (SME’s improvement). In other words, the results of predictor variables show that; loan (β = 0.076, t = 1.977, p < 0.05), cost of loan (β = -0.900, t = -23.322, p < 0.05). The study concluded that the amount of loan received by loan beneficiaries are no affordable and not sufficient to meet the expectations of loan beneficiaries. Also, unfavorable loan fees payment slows down the SMEs operation. Finally, the study recommended that micro finance institutions should prepare the seminar and trainings to be given to the entrepreneurs on the loan management.
    VL  - 10
    IS  - 1
    ER  - 

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Author Information
  • Economic and Finance, Department of Economics, Zanzibar University, Zanzibar, Tanzania

  • Department of Economic, Zanzibar University, Zanzibar, Tanzania

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