Abstract:
The main objective of this study was to examine the role Business Development Service (BDS)
providers in enhancing SMEs financial performance in Tanzania. This study was guided by
several specific objectives which include: to examine the challenges facing SMEs in accessing
loan to BDS provider. The sample of 69 respondents were engaged in the study where data
was collected using administered questionnaires. Data were analysed using descriptive and
inferential statistics. The results obtained from descriptive statistics has shown that, most of
respondent’s views on SMEs financial performance as a dependent variable and independent
variables were showing a positive relationship. The findings show that, main challenges facing
SME in accessing loan from BDS include business formalization, collateral requirements and
lack of capacity to pay for loan. On the other hand, the regression findings have shown the
presence of positive and significant relationship between all independent variables and the
dependent variable. The researcher found that, dependents variables were significant joint
predictors of SMEs performance with the correlation of 79.2%, and adjusted R square equal
to 80.4%, this means that, the predictor variables jointly explained 80.4% the variation of
SME performance, while the remaining 19.6% could be due to effect of other factors. The
researcher recommended that, less constraints on loan requirement should also be considered
so as to enable these SMEs to borrow and invest the borrowed funds, to further expansion and
increase their performance.
