4.1 The situation of women in MSMEs: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
4.1 The situation of women in MSMEs: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
predominantly found in informal, micro level, and low-growth sectors, and encounter
high competition while earning subsistence incomes. Seriously encumbered by their low
levels of education, women are unable to find employment in the formal, private sector,
and are the first to lose their jobs in retrenchment exercises. Of necessity, they are driven
into entrepreneurial activities. Their business opportunity identification tends to reflect
their traditional roles in food production, sewing, crafts, small-scale farming, and smallscale
cooperative production. These activities are “somewhat” culturally acceptable.
Several key informants stated that many women lack exposure and socialization, which
restrict their ability to identify higher growth potential business ventures. They are likely
to be operating in groups from home, and often lack social, cultural and business support
for their role as entrepreneurs.
Women operating in the informal economy lack the ability to accumulate the
savings required for the start-up process – women with poor levels of education are less
likely to have accumulated savings from previous employment. They additionally lack
access to working capital and credit and, as a result, have low profits to reinvest in their
firms. Tanzanian women, as is the case with women entrepreneurs in many countries
throughout the world, are reported to be “risk adverse”,19 with limited capacity to absorb
the cost of failure. Micro credit key informants reported that micro-financing is readily
available and that high percentages of their clients are women. However, their
assessment is that women need to be better informed about financial services, the
correlation between debt and growth, and how to deal with lending institutions.
Tanzania’s women entrepreneurs are quite often lack technical and business
management skills, including the sophistication needed to negotiate with financial
institutions.20 The exception to this are women in large urban centres, or those in the food
processing industry, who have substantial support from organizations such as the Small
Industries Development Organization (SIDO). These women do have some potential for
growth, subject to market identification and adequate capital for processing equipment.
Nchimbi (2003) found that women’s motivation for being in business is, more often than
men, to provide family support. This is the primary measure of their success, while their
male counterparts perceive profit as the primary measure of success. Less than 40 per
cent of the Tanzanian women in the Nchimbi study demonstrated a “high need for
achievement” and a desire to grow. Instead they tend to approach growth slowly, often
preferring to own multiple micro-enterprises, rather than to invest in the growth of only
one. Many factors could contribute to this tendency – the inability to attract sufficient capital to scale up, lack of opportunities to meet the needs of tiny market niches in their
local communities, or lack of skills to take an enterprise beyond the micro-level.
Nchimbi notes differences between women and men in the MSE sector, although
comprehensive gender comparisons in the sector have not been done. Women tend to
have higher illiteracy rates than men; are “afraid” to take bigger loans; have less
collateral to back bigger loans; work harder at marketing their products, but lack
bargaining and negotiating power; and have less access to business premises, so tend to
be more home-based.
41 The situation of women in MSMEs Support for Growthoriented Women Entrepreneurs in Tanzania 2005 - To learn more about this author, visit International Labour Organization's Website.
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Key informants confirmed findings from the literature – that women are
predominantly found in informal, micro level, and low-growth sectors, and encounter
high competition while earning subsistence incomes. Seriously encumbered by their low
levels of education, women are unable to find employment in the formal, private sector,
and are the first to lose their jobs in retrenchment exercises. Of necessity, they are driven
into entrepreneurial activities. Their business opportunity identification tends to reflect
their traditional roles in food production, sewing, crafts, small-scale farming, and smallscale
cooperative production. These activities are “somewhat” culturally acceptable.
Several key informants stated that many women lack exposure and socialization, which
restrict their ability to identify higher growth potential business ventures. They are likely
to be operating in groups from home, and often lack social, cultural and business support
for their role as entrepreneurs.
Women operating in the informal economy lack the ability to accumulate the
savings required for the start-up process – women with poor levels of education are less
likely to have accumulated savings from previous employment. They additionally lack
access to working capital and credit and, as a result, have low profits to reinvest in their
firms. Tanzanian women, as is the case with women entrepreneurs in many countries
throughout the world, are reported to be “risk adverse”,19 with limited capacity to absorb
the cost of failure. Micro credit key informants reported that micro-financing is readily
available and that high percentages of their clients are women. However, their
assessment is that women need to be better informed about financial services, the
correlation between debt and growth, and how to deal with lending institutions.
Tanzania’s women entrepreneurs are quite often lack technical and business
management skills, including the sophistication needed to negotiate with financial
institutions.20 The exception to this are women in large urban centres, or those in the food
processing industry, who have substantial support from organizations such as the Small
Industries Development Organization (SIDO). These women do have some potential for
growth, subject to market identification and adequate capital for processing equipment.
Nchimbi (2003) found that women’s motivation for being in business is, more often than
men, to provide family support. This is the primary measure of their success, while their
male counterparts perceive profit as the primary measure of success. Less than 40 per
cent of the Tanzanian women in the Nchimbi study demonstrated a “high need for
achievement” and a desire to grow. Instead they tend to approach growth slowly, often
preferring to own multiple micro-enterprises, rather than to invest in the growth of only
one. Many factors could contribute to this tendency – the inability to attract sufficient capital to scale up, lack of opportunities to meet the needs of tiny market niches in their
local communities, or lack of skills to take an enterprise beyond the micro-level.
Nchimbi notes differences between women and men in the MSE sector, although
comprehensive gender comparisons in the sector have not been done. Women tend to
have higher illiteracy rates than men; are “afraid” to take bigger loans; have less
collateral to back bigger loans; work harder at marketing their products, but lack
bargaining and negotiating power; and have less access to business premises, so tend to
be more home-based.
41 The situation of women in MSMEs Support for Growthoriented Women Entrepreneurs in Tanzania 2005 - To learn more about this author, visit International Labour Organization's Website.
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