Abstract:
The study examined the influence of Business Development Services on access
to finance for Small and Medium Enterprises in Tanzania. The study was
conducted on private agricultural sector support (PASS) for small and medium
enterprises (SMEs) to access debt finance from formal financial institutions. Out
of the 1000 SMEs listed from PASS, a sample of 278 SMEs were selected using
the sample determination formula. Two hundred seventy-eight (278)
questionnaires were distributed to SMEs, and only two hundred sixty-two (262)
were returned and filled out. Data was coded in SPSS and analysed using
Standard multiple linear regression. The results indicated that BDS explained 8.0
per cent of change in access to finance. The beta coefficients of all independent
variables were positive, which implied that a unit increase in training leads to an
increase in access to finance by 0.102, and one unit increase in financial linkage
leads to a 0.039 increase in access to debt finance and a one unit increase in
guarantee lead to 0.167 increase in access to finance. The study concludes that
guarantee contributes more to access to debt finance than financial linkages and
training. The study recommends that BDS be provided conveniently and
affordable to enable SMEs to access debt finance easily from formal financial
institutions.
