The Challenges Of Financial Communication On The Growth Of Smes In Tanzania
Keywords:
Communication. financial. report. SMEs.TanzaniaAbstract
Purpose: Financial communication is an important vehicle toward Small and Medium Enterprises (SMEs) growth in developing countries, including Tanzania. Financial communication enables various units in the business to understand the available opportunities either for investment or improving investments. From that ground, the study seeks to explore the challenges of financial communication on SMEs growth in Tanzania. To meet this goal three specific objectives were employed: identify the availability of financial communication used by SMEs in Tanzania, explore the financial communication practices used by SMEs in Tanzania and examine the financial communication challenges for developing SMEs in Tanzania.
Design/Methodology/ Approach: The study was qualitative in nature and it employed a case study approach as it enables a researcher to retain the holistic and meaningful features. Three cases were selected and studied based on the classification of enterprises. Purposive sampling was employed to select 20 respondents including owners or managers, employees and customers in the respective businesses. The study was conducted in Dar es Salaam City. The instruments used included in-interviews, observation and documents review. Data collected via interview recorded and transcribed by using Express Scribe Transcription Software. Descriptive analysis technique to analyze data collected.
Findings: The data obtained show the availability of inadequate financial communication, the presence of both traditional and modern channels of disseminating financial information, limited financial education, cooking of financial records and absence of monthly and quarterly financial statements. All those shortcomings hinder SMEs development in Tanzania to develop and tap business opportunities around them.
Practical Implications: Therefore, SMEs should be provided with an appropriate financial education which will help them to see the opportunities around them by having and disseminate appropriate financial information. These results will enable the government to stress on viability of financial information and its effective use in the growth of SMEs.
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