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Performance drivers of women-owned microcredit funded enterprises in Tanzania

Charles Stephen Tundui (Faculty of Social Sciences, Mzumbe University, Mzumbe, Tanzania)
Hawa Petro Tundui (School of Business, Mzumbe University, Mzumbe, Tanzania)

International Journal of Gender and Entrepreneurship

ISSN: 1756-6266

Article publication date: 25 February 2020

Issue publication date: 27 April 2020

641

Abstract

Purpose

The purpose of this paper is to investigate performance drivers of women-owned businesses that are funded primarily through microcredit. It draws on Storey’s theory of small business growth and family embeddedness axiom to examine the factors that drive the performance of businesses that are funded primarily through microcredit.

Design/methodology/approach

The paper uses a cross-sectional survey that covered 208 women business owners who had access to microcredit. The authors use a logistic regression analysis to model the relationship between independent variables and enterprise performance.

Findings

The paper demonstrates that microcredit plays a significant role in business performance. The credit amount has the most significant influence on the enterprise capital base, whereas the effect on profits is insignificant. Also, owners are more likely to report growth in profits if they possess skills in business management. In addition, younger business owners and necessity entrepreneurs are more likely to report success in their businesses. Other factors that have a significant effect on business performance are product cycle, loan use and family support.

Originality/value

Many women in Tanzania are entering business ownership and depend on microcredit as their primary source of capital for starting and growing their businesses. However, just a few businesses grow into small and medium-sized enterprises. For informed policy decisions, it is important that the factors influencing the performance of funded businesses are known and well understood. This understanding will help the government and development practitioners assist women in achieving business growth rates that could warrant their empowerment and poverty reduction prospects.

Keywords

Citation

Tundui, C.S. and Tundui, H.P. (2020), "Performance drivers of women-owned microcredit funded enterprises in Tanzania", International Journal of Gender and Entrepreneurship, Vol. 12 No. 2, pp. 211-230. https://doi.org/10.1108/IJGE-06-2019-0101

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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