Volume 2, Issue 2, May 2017, Page: 84-91
Constraints in Accessing Credit for SMEs to Acquire Capital from Microfinacial Institution’s -Tanzania
Ali Othman Abbas, School of Accountancy, Jiangxi University of Finance and Economics, Nanchang, China
Ji Wei Li, School of Accountancy, Jiangxi University of Finance and Economics, Nanchang, China
Received: Mar. 31, 2017;       Accepted: Apr. 25, 2017;       Published: May 30, 2017
DOI: 10.11648/j.ijafrm.20170202.16      View  1720      Downloads  81
Abstract
The objective of this study was to illustrate, the constraints in accessing credit for SMEs to acquire capital from micro financial institutions as regards business capacity, default risk premium, and liquidity risk premium. The plan, which was engaged in this study, was descriptive assessment. The aim of adopting this method was to gather comprehensive, systematic and in-depth information about the restriction of SMEs to access credit from MFIs. The sample size of the study was 100 SME’s known as (clients) and 50 MFI’s operated in Tanzania. Data were collected through a questionnaire and interview. SPSS software was used for data analysis. There was a strong negative correlation between default risk premium and liquidity risk premium and positive correlation between business capacity and loan repayment. The study recommended that in order to reduce the burden of interest amount to be paid by their clients, MFIs should be reduced interest rate to cover its costs and obtain normal profits, also should train their clients about business knowledge, the importance of keeping business records and techniques of valuing business capacity to enable their clients to measure their business capacity and know the appropriate amount of loan to be applied for their businesses.
Keywords
Microfinance Institutions, Business Capacity, Default Risk Premium, Liquidity Risk Premium, Loan Repayment and Interest Rate
To cite this article
Ali Othman Abbas, Ji Wei Li, Constraints in Accessing Credit for SMEs to Acquire Capital from Microfinacial Institution’s -Tanzania, International Journal of Accounting, Finance and Risk Management. Vol. 2, No. 2, 2017, pp. 84-91. doi: 10.11648/j.ijafrm.20170202.16
Copyright
Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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