Challenges facing women entrepreneurs in accessing loans from commercial banks

Abstract

Women Entrepreneurs plays a substantial role in the economic development in both developed as well as developing countries. In Tanzania women contribute much though their contributions are still insignificant due to a number of barriers towards their financial inclusion.This study’s objective is to determine various challenges that faces women entrepreneur in accessing loans from commercial banks. To meet the objectives of the study a sample of 120 respondents was used. Primary data was collected using close ended questionnaires. The results obtained through the quantitative approach usedindicated that there is a positive relationship between interest rate, financial literacy and collaterals with accessibility to finance. The reliability and validity of scale measurement for measuring these factors was proven by the value obtained from Cronbach’s alpha test. Both descriptive and inferential analyses were conducted to analyze the data obtained. Pearson correlation was conducted so as to determine the relationship that exists between the dependent and independent variables. Basing on the results, four factors were observed to have an influence on accessibility to finance where interest rates, financial literacy, and collaterals were observed to have a positive influence while loan terms and condition factor had a negative impact to the dependent variable. Basing on the findings the study recommends that financial institutions specifically commercial banks should be gender sensitive in terms of collateral demanding and they should come up with products and services that are responsive to specific needs of women entrepreneurs during loan acquisition. On interest rates the government through the Central Bank should intervene to make them affordable and friendly. lastly commercial bank should develop programs to provide education, training and information, this can be attained by extending a line of employees that are specifically for this purpose. Also the study recommends for further study so as to fill the gaps that might have been left out by the researcher.