With respect to commercial bank financing, key informants indicated that banks lack experience in dealing with the SME sector. Traditionally, Tanzania’s banks have focused on deposits and low risk investments, such as Treasury Bills (T-bills). Of late, due to lower deposits and declining rates on T-bills, banks are becoming more open to looking at opportunities in the SME market, but a mechanism is needed to accelerate their learning in assessing SME risk. Furthermore, banks have very little experience in lending to women and need awareness and sensitivity training to overcome the perceptual bias that “all women have informal sector enterprises with no growth potential”.
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