Abstract:
The study sought to examine factors affecting SIDO in instituting services to SMEs in Arusha City.
Specific objectives were to examine whether SIDO human resource capacity affects the institution
of services to SMEs in Arusha City, to determine if SIDO material resources capacity affects the
provision of services to SMEs in Arusha City and to find out ways of improving SIDO services to
SMEs in Tanzania. This study was guided by contingency theory and Goal setting theory. The
study adopted a descriptive research design. The study used a sample size of 50 respondents
who were selected through purposive sampling. Data was collected by use of questionnaires and
interviews. Data was analyzed by the aid of Statistical Package for the Social Sciences (SPSS)
Program and content analysis. The study unveiled that a number of SMEs trainers in SIDO is not
adequate and SIDO employees are not motivated in instituting services to SMEs. Further, study
findings revealed that SIDO has partial computerized system for data keeping and sharing of
information. Moreover, findings indicated that providing more funds to SIDO to meet SMEs
financial requirements and increasing awareness to SIDO employees regarding SMEs services
will improve SIDO services to SMEs in Tanzania. The study concluded that improving SIDO
services will strengthen SMEs capacity which will enable them to effectively contribute to the
national efforts of developing a strong base for industrialization. The study recommended that to
promote the industrialization economy, Policy Makers and Government of Tanzania should create
supportive environment for SME products to compete with the imported products by enhancing
legal and regulatory framework, which favor SMEs growth.
