Abstract:
The purpose of this study was to assess the business skills and knowledge of loan utilisation in
Tanzania. The study was guided by dual process and human capital theory. The study concentrates
on Micro and Small enterprises in Iringa Region where descriptive research design was adopted. A
total number of 98 respondents constituted the sample. The sample understudy was Micro and
Small enterprises owners/managers. The respondents were interviewed by using structured
questionnaire. The analysis was carried out by using descriptive statistics. The data used was
collected through closed-ended questionnaires as well as secondary data. The data was analysed
using quantitative methods. The mean and percentage of the respondents included in the analysis
show that the level of business skills and knowledge affects the financial performance of the SME's
in the Iringa Region. However, the business skills and financial knowledge had an impact on the
financial performance of the SME's. On the other hand, financial institutions support and
government initiatives and policies enhance the financial performance of the SME's. The study
concludes that SME's must build business skills and financial knowledge in order to foster better
business growth for their SME's. The study recommends that financial institutions to design training
programs for micro and small businesses that reflects the nature and type of businesses undertaken
in the country at an affordable price. Moreover, owners/managers of Micro and Small enterprises
were argued to attend business training/seminars/workshops that will enable them to acquire
marketing, financial, human relation and other related business skills so as to cope with business
turbulence and attain sustainable development. The study recommends to the government that it
give tax incentives to the banks that support SME's access to loans
