Capabilities of business development service providers’ in service delivery to small and medium enterprises in Arusha city and Moshi municipality
| dc.contributor.author | Kweka, Anande Erasto | |
| dc.date.accessioned | 2023-02-17T10:54:04Z | |
| dc.date.available | 2023-02-17T10:54:04Z | |
| dc.date.issued | 2022 | |
| dc.description | Thesis | en_US |
| dc.description.abstract | Despite the various interventions aimed at supporting Micro, Small and Medium Enterprises (MSMEs) in Tanzania, the challenges facing their development have persisted. Business Development Services (BDS) providers have an instrumental role in MSMEs development. However, the question of capability of BDS providers and hence their effectiveness in delivering BDS to MSMEs is yet to be adequately addressed. The main objective of this study was to assess BDS providers’ capabilities in service delivery to MSMEs in Arusha City Council and Moshi Municipality. Specifically, the study analyzed BDSPs internal resources endowment, service delivery pathways and MSMEs absorptive capacity. Business Development Service Providers are recognized as public and private firms which provide a range of non-financial services to MSMEs. The study employed the cross-sectional design and mixed approaches namely qualitative and quantitative. A sample size of 254 MSMEs respondents was chosen using a simple random sampling technique and a sample size of 65 BDS providers were chosen using a purposive sampling technique. Primary data were collected using Key Informants Interviews (KII), a questionnaire survey, documentary review and focus group discussions (FGDs) methods. Qualitative data were analysed using content analysis and quantitative data were analysed using the Statistical Package of Social Science (SPSS) software, for descriptive statistics including frequencies and percentages. The study results revealed that, most of the BDS providers had inadequate human resources to match the appropriate service delivery. However, MSMEs were highly satisfied with the personnel expertise and accessibility to services but they were dissatisfied with the costs of the service and increased operating expenses. Increased business operating expenses were caused by uncontrolled rent on business premises fluctuating transportations costs, raw material costs, and price fluctuations of raw materials. However, despite the inadequate resources of BDS providers, the impact of their services was significant in various MSMEs. The reported impacts derived from BDS provided to MSMEs were, increased ability to access inputs and loan, increased ability to run businesses and use of technology, increased yield and business diversification. The majority of BDS providers were private entities and mainly provided market access, provision of input supply, and alternative financing to MSMEs. This implies that most of the service providers in the study area w ere market oriented. However, there was a significant difference with regard to public BDS providers doing better in provision of infrastructure development and policy/advocacy because they are long lived and capital intensive. However, the most preferred service delivery pathways by BDS providers were training, seminars and workshop, technical demonstration centers and trade exhibitions, these were easier to organize and involved a large number of their clients. The findings also revealed the difficulty in determining the most appropriate pathway to follow in delivering BDS to MSMEs. The reasons being that in some cases, BDS providers used more than one delivery pathway. However, the study revealed a lack of generic service delivery pathway since each BDS provider has its own focus and work independently while MSMEs differed from one enterprise to another. Similarly, the study findings indicated that, the majority of MSMEs owners had secondary education and an experience of one to three years business management. Also, the majority of enterprises were micro with capital of more than or equal to Shs. <5million and more than or equal to < 5 employees. This indicates that, the majority of MSMEs had the capacity to identify appropriate BDS to meet their needs although an experience of 1-3 years in business management could impair their capacity to adopt to new knowledge timely. The findings also show that, the majority of enterprises were micro enterprises. This depicts low capital and therefore low ability to access and apply BDS for innovation, although they can access BDS through sponsored trainings, incubators and networking that allow sharing of resources and information. Similarly, it was observed that, despite the government's efforts to promote public BDS providers by providing incentives, access to BDS from these firms remained low, with only (39.8%) of MSMEs using their services. It is worth noting that, insufficient support and less accessibility of public BDS may impair development of MSMEs because of their low ability to purchase services from private service providers. In conclusion, capability of BDS providers is not only explained by capability of resources endowed because, in the study area the level of resources endowment differs from one BDSPs to another and the same applies to service delivery pathways. It was evident that effective BDS delivery depends on absorptive capacity of MSMEs to access and use delivered services. This implies that capability of BDS resources alone is not sufficient to enable successful service delivery, unless MSMEs are willing to access and utilize delivered services. Therefore, consideration of MSMEs absorptive capacity has to be taken seriously before development and delivery of BDS. This study advocates for policy makers to consider establishing guidelines which will be used to guide delivery of BDS. The government should also provide subsidies for private service providers who can invest and bring in appropriate technology to MSMEs. Subsidies should be attractive enough to compensate for the costs that may be incurred. In addition, policies such as minimum local content policies should be applied to motivate BDS providers to provide services to MSMEs particularly micro and small enterprises. This study has provided some empirical insights on the areas of focus and or future improvement to the MSMES policy of 2012 particularly on the business development service delivery standards and guidelines for service provision; such aspects are currently inadequately addressed. | en_US |
| dc.description.sponsorship | Tengeru Institute of Community Development (TICD) | en_US |
| dc.identifier.uri | http://www.suaire.sua.ac.tz/handle/123456789/4965 | |
| dc.language.iso | en | en_US |
| dc.publisher | Sokoine University of Agriculture | en_US |
| dc.subject | Medium enterprises | en_US |
| dc.subject | Arusha city | en_US |
| dc.subject | Moshi municipality | en_US |
| dc.subject | Business development | en_US |
| dc.subject | Small enterprises | en_US |
| dc.title | Capabilities of business development service providers’ in service delivery to small and medium enterprises in Arusha city and Moshi municipality | en_US |
| dc.type | Thesis | en_US |