Department of Finance

Permanent URI for this collection

https://repository.udsm.ac.tz/handle/123456789/58

Browse

Now showing 1 - 20 of 71

Access to Business Development Support Services and Performance of Youth- Owned Enterprises in Tanzania
(2015) Mori, Neema
We investigated a sample of 3,098 randomly chosen youth-owned enterprises (YOEs) in Tanzania and studied their access to business development support (BDS) services. YOEs are defined as enterprises owned and run by young entrepreneurs, aged between sixteen and thirty-five, according to the Tanzanian definition of youth. We analyzed which BDS services affect the performance of YOEs in terms of (i) number of employees, (ii) whether the enterprise keeps financial records and (iii) the entrepreneurs’ perception of the performance of their enterprises. With the support of the resource- based view, we found that access to expert advice is positively associated with a YOE’s number of employees and their ability to keep financial records. We also found that access to business management training and entrepreneurship training positively influences financial record keeping and enterprises’ perceived performance. Overall, we conclude that the resources that young entrepreneurs obtain through their access to BDS services are crucial for their enterprises. Keywords: youth, business development services, YOEs, Tanzania.
Access to Finance for Smes in Tanzania
(2009) Mori, Neema
Account Receivable Management Practices of SMEs in Tanzania: A Qualitative Approach
(BMR, 2019) Richard, Evelyn M; Kabala, Benedicto
This paper focused on establishing how micro, small and medium enterprises (MSMEs) operating in Tanzania manage debtors. The study used an exploratory approach and was informed by the asymmetric information theory. Saturation point was reached in the fifteenth case. A content analysis was used for the data analysis. The findings show that MSMEs are aware of the importance of managing debtors; they use different means to screen prospective debtors and follow them so that they get paid on time.The same methods are used to monitor and control bad debts. Informal networking, calling debtors, and visiting their residencesor workplaces are mostly used to reduce asymmetric information problems. The paper contributes to the theory by stressing the importance of searching for relevant information while managing debtors.The results further depict the formal credit risk management process and contribute to the literature on the actual methods used by MSMEs while managing debtors. Results suggest that less costly methods of monitoring debtors should be sought and used.
Assessing the Portfolio Behavior of Commercial Banks in Developing Countries: A Literature and Methodological Issues for the Case of Tanzania Commercial Banks
(International Academy for African Business and Development (IAABD), 2011-05) Swai, Tobias A.
This paper is a work in progress and tries to analyze briefly the literature, proposed hypotheses and methodology for assessing portfolio behavior of commercial banks in Tanzania. Many developing countries have adopted various measures for the economic and trade liberalizations including financial liberalization, Tanzania being unexceptional. Financial sector is believed to be the engine for the economy and economic growth. The liberalization of the financial sector took various forms involving local financial institution and multinational banks of various sizes. The assessment of portfolio behavior of the commercial banks has received little attention to these developing countries especially on the extent to which the commercial banks invest in various assets and the return they realize out of these investments. The literature suggests an optimal profit maximization model in portfolio allocation, by the use of both choice and non choice variables to be relevant in analyzing bank behavior. In the proposed study the researcher proposed the use of quarterly bank financial statements in a panel form for a period of over 10 years and inclusion of bank qualitative variables over the period of study, in a profit maximization equation.
Bank Charges and Performance of Commercial Banks in Tanzania
(2015-02) Riziki, Mathewcleophas
Bank charges arise from six broad categories of services namely: saving accounts, current accounts, foreign exchange account charges, automatic teller machine transactions, mobile banking, internet banking and money remittances. The nature and trend of bank charges differs from one bank to another. However, the nature and trend of bank charges as well as its impact on performance of commercial bank mainly on the bank profitability has remained an unstudied. This study analysed five commercial banks in Tanzania that have adopted different service charges between 2011 and 2013. By using bank specific charges, the researcher investigated the nature, trends and impact of bank charges on the Return on Assets (ROA) and Return on Equity (ROE). The results reveal that the overall nature of bank charges is not homogenous among the commercial banks studied. Additionally majority of banks have positive trends on the average charges and number of charges imposed by the bank over the year, while few constant or negative trends. The results also indicated that, some charges were significant to banks’performance as measured by Return on Assets (ROA) and Return of Equity(ROE) and others were not. The study contributes to the understanding of the nature, trend of the bank charges and their relation to performance of commercial bank in Tanzania. It calls for the closer examination of the commercial bank diversification of fee generating services and the nature of the bank charges in relation to the performance of financial institutions.
BANKERS’ PERCEPTION ON THE IMPACT OF COVID-19 IN THE BANKING SECTOR
(Center for Banking and Financial Services Research, 2020-05-20) Swai, Tobias A.; Richard, Evelyn
The presentation offers results from an online survey of 127 Bankers on the Impact of COVID-19 in the banking sector in Tanzania. The respondents indicated that COVID-19 might have a long term impact to businesses and the economy. Mostly affected sectors being tourism, hotel and restaurants. Banking profitability, foreign exchange exposure, new savings and risks profile of current investments likely to be affected. Intervention by Central bank on policies related, special minimum reserve, liquidity support, revision of net open position is highly recommended.
Board Committees and Performance in Microfinance Institutions: Evidence from Ethiopia
(2018) Dato, Muluneh; Mersland, Roy; Mori, Neema
This paper empirically relates subordinate board structures with improved financial and social performance in microfinance institutions (MFIs). The research question is analyzed using a panel data from 23 microfinance institutions in Ethiopia over a period of 2006— 2011. Random effects panel data estimation is applied to analyze the link between board committees and MFI's performance. In MFIs with larger than average boards, the findings demonstrate significant ties between financial and outreach performance and how their boards are structured. The structure of board committees moderates the relation between board size and financial and outreach performance measures. Importantly, board committee benefits MFIs through better operational self-sufficiency, lower operating expenses, greater outreach to customers, and outreach to poorer customers using average loan size as our proxy. Practitioners within microfinance sector, and those operating in advisory and regulatory roles to the sector could benefit from the argument advanced in the paper in that normative recommendation to restructure boards or establish committees requires reevaluating the board characteristics vis-à-vis the optimal monitoring, controlling, and advising needs of the institution. Prior literature focuses on who sits on boards, how large are the boards, and how independent are they. This paper advances our understanding of the structure of board committees and how this may affect the performance of MFI. This approach provides better representation of director's role and is thereby a good test of board effectiveness.
Board Composition and Outreach Performance of Microfinance Institutions: Evidence from East Africa
(Wiley, 2015) Mori, Neema; Golesorkhi, Sougand; Randøy, Trond; Hermes, Niels
The attributes of microfinance’s board members have an impact on attainment of their social objectives.
Board Composition and Social Performance of Microfinance Institutions: Evidence from East Africa
(Strategic Change, 2015) Mori, Neema; Gholersaki, Sougand; Randøy, Trond; Hermes, Niels
Board composition and poverty outreach of MFIs appear to be related. The proportion of independent, international, female, and/or founding board members appears to be associated with measures of outreach performance using data on MFIs in East Africa. Findings suggest that outreach performance is improved when MFI boards have a higher share of independent, international, and/or female members, which supports the hypothesis that board composition is important in helping MFIs to achieve their social objectives.
Board Gender Diversity: Challenges and Implications for Corporations in East African Community
(Journal of African Business, 2019) Richard, Evelyn M; Mori, Neema, G
East African Community’s (EAC) corporations are required to follow a regional treaty of mainstreaming gender equality. This article discusses challenges encountered by corporate boards of the EAC’s corporations when adding women. Agency and resource dependence theories led the study, while a review of the literature was the methodology. We discuss the benefits of diverse boards and challenges faced when developing this diversity. We show how power distance, masculinity, and certainty avoidance prevent women from corporate boards. Furthermore, we discuss how social orientation and business environment impact women’s participation. The article discusses various strategies to be considered for increasing diversity.
Boards in microfinance institutions: how do stakeholders matter?
(Springer, 2014) Mori, Neema; Mersland, Roy
Microfinance Institutions provide financial services to poor people. Governance of these organizations is important so that they can operate efficiently and sustainably. This study analyzes the influence of stakeholders (donors, employees, customers, and creditors), on board structure (board size and CEO duality), and on organizational performance. We use a global data set of 379 microfinance institutions from 73 countries, collected from rating organizations. Supported by stakeholder theory, agency theory and resource dependence theory, we find stakeholders to be important and have various influences on microfinance institutions. We find donors to be associated with small boards, non-duality and better performance. Employees are associated with large boards, while customers are associated with duality and good financial performance. Creditors opt for duality and better social performance. Implications and areas for future research are discussed.
Boards in Microfinance Organizations: Do Stakeholders Matter?
(2014) Mori, Neema; Mersland, Roy
Microfinance organizations provide financial services to low income people. Governance of these organizations is important for them to efficiently reach poor people and survive financially. Board is one among several governance mechanisms. This paper empirically analyses the influence of stakeholders who sit on boards, on financial and outreach results of microfinance organizations. Based on resource dependence and stakeholder theories, we analyze four types of stakeholders; donors, customers, employees and creditors. Results show that stakeholders are important in microfinance and that more non-profit organizations have donors on boards than for-profit organizations while customers and employees are found to be more represented on for-profit organizations. Regression results show that stakeholders through their resource provision role contribute both positively and negatively to financial and outreach results. Implications and areas for future research are further discussed.
Borrower Characteristics and Delinquency among Rural Based Savings and Credit Co-operative Societies in Tanzania.
(2016-08) Mori, Neema; Nyantori, Thadei; Olomi, Donath
This study examines the influence of economic and financial literacy on the delinquency and default rate of clients of rural Savings and Credit Co-operative Societies (SACCOSs) in Tanzania. The data were collected from a random sample of 200 individual loan beneficiaries drawn from eight SACCOSs, and analysed using regression models. The findings established that the level of economic and financial literacy of rural borrowers is very low. The study also found a negative relationship between economic literacy and financial literacy, on the one hand, and default and delinquency, on the other. This suggests that borrowers’ inability to make prudent borrowing and investment decisions, rather than poor intentions, is the main explanation behind the failure to meet debt obligations. Therefore, conventional microfinance may be penalising those with the least human capital, who happen to be the poorest people. The findings underline the need to invest in enhancing the poor’s human capital to ensure sustainable financial deepening and a positive impact on poverty.
Business Constraints and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda
(2008) Ishengoma, Esther K.; Kappel, Robert
Ugandan micro- and small enterprises (MSEs) still perform poorly. The paper utilizes data collected in Uganda in March and April 2003 to analyze the business constraints faced by these MSEs. Using a stratified random sampling, a sample of 265 MSEs were interviewed. The study focuses on the 105 manufacturing firms that responded to all questions. It examines the extent to which the growth of MSEs is associated with business constraints, while also controlling for owners’ attributes and firms’ characteristics. The results reveal that MSEs’ growth potential is negatively affected by limited access to productive resources (finance and business services), by high taxes, and by lack of market access.
Business Development Services to SMEs: Experiences from an Online Business Plan Competition in Tanzania
(International Academy for African Business and Development (IAABD), 2008-05) Olomi, Donath R.
Many initiatives have been taken to promote the private sector, which is now considered the engine for growth in all economies. A common approach to private sector development is the building of capacities for identification of innovative ideas and transforming these into bankable business plans. Unfortunately, little effort has been done to systematically learn from such experiences and hence inform improvements and replication for impact. This paper analyses the experience of organising an online internet based business plan competition by the University of Dar es Salaam Entrepreneurship Centre in collaboration with Business in Development Network Foundation based in Netherlands in 2007. The aim is to explore and share challenges, lessons and critical success factors for such and related initiatives.
Business Environment and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda
(2011) Ishengoma, Esther K.; Kappel, R.
Since the 1990s, studies utilizing descriptive statistics have documented factors in the business environment, which hinder the performance of Ugandan micro and small enterprises (MSEs). Based on secondary data, this paper assesses the trend of critical factors since 1994 to 2010. The paper also utilizes the primary data from MSEs to examine the effects of these factors on the growth potential of MSEs, while controlling for the owner’s and the firm’s attributes. Results from the trend analysis reveal that the business environment has been deteriorating over time. Results from the regression analyses reveal that MSEs’ growth potential is negatively associated with limited access to productive resources, high taxes and lack of market access
Can university-industry linkages stimulate student employability?
(Emerald Group Publishing Limited, 2016-01) Ishengoma, Esther, K; Vaaland, Terje I.
Purpose The purpose of this paper is to identify important university-industry linkage (UIL) activities that can stimulate the likelihood of employability among students. Design/methodology/approach A total of 404 respondents located in Tanzania, comprising students, faculty members and employees from 20 companies operating within the oil and gas industry and mining constitute the empirical basis for the study. Descriptive analysis, the Mann-Whitney U-test and a Kruskal-Wallis test were applied to help analyse the data. Findings The results reveal that UIL activities were strongly perceived to raise the employability of students, in particular student internships in companies followed by joint projects and the involvement of companies in modernizing university curricula. Adoption and diffusion internship strategies are suggested for foreign companies and for local firm, respectively, as vehicles for increasing employability. Research limitations/implications Perceived effects on the likelihood of employability are measured, and not actual effects. Practical implications The findings have implications for foreign companies exploring resources in the host country, local firms trying to improve competitiveness, universities trying to improve its role in society, students preparing for work-life and policy makers defining premises for resource-extractive foreign companies. Originality/value Very few empirical studies of UILs have previously been carried out in a developing country context, and in particular in dealing with student employability. The fact that many developing nations have attractive rich natural resources implies that international companies have a motive to invest in the UILs, and possess valuable competencies that can improve the overall quality of the universities and the attractiveness of graduating students.
Commercial banks portfolio holdings behaviour: does size and ownership matter? Evidence from Tanzania
(African Journal of Finance and Management, 2016-10) Swai, Tobias A.; Lwiza, Daudi R.; Ndanshau, Michael O.
This study examined the portfolio behaviour of commercial banks in Tanzania by using panel financial data of 14 banks from 1998 to 2010 on a quarterly basis, making 52 quarters and 728 observations. The sampled banks had more than 85% of the total commercial banks assets on average for the time of study. The study objectives were to analyze the portfolio behaviours of commercial banks in Tanzania with respect to the size of the bank and ownership. Financial statements data was collected from quarterly mandatory publication of the bank data for the individual banks and were analysed based on an ordinary least squares model. Findings revealed that banks do hold their portfolios with very little differentiation amongst themselves which indicates that there is little or same innovation patterns. The assets allocation is more with the loan products and investment in government securities. Large banks and foreign banks enjoy returns from the interbank lending due to their relatively large capital and assets base. The study calls for innovation, organizational learning and specialization of banks, and more oversights on the foreign bank entry as well as for the large banks.
Demographic Characteristics of Credit Officers and Risk Management in MFIs in Tanzania
(Practical Action Publishing, 2019) Richard, Evelyn M; Mori, Neema G; Swai, Martha
Purpose: This article examines the effect of demographic features of credit officers on risk management in MFIs Methodology: A dataset of 200 credit officers from 20 MFIs in Tanzania was used. Descriptive and econometric models were used for analysis. Findings: Work experience, age and education level of credit officers influence credit risk management. Based on the information asymmetry theory the study observed that the gender, marital status and the location of MFIs do not influence credit risk management. Practical implications: MFIs should consider the demographic profile of their credit officers and employ educated, skilled and experienced personnel for screening and monitoring the use of the loan to reduce the risk of the loan not being repaid. Originality: The study contributes to the theory by showing that experience and education matter in terms of organizations' ability to reduce information asymmetric problems, which in turn helps risk management.
Descriptive Analysis of the portfolio behaviour of De Novo Commercial Banks in Tanzania
(The Operations Research Society of East Africa Journal, 2018-06) Swai, Tobias A.
The purpose of this paper is to examine portfolio behavior of newly established banks in Tanzania based on the ownership structure i.e. foreign vs local commercial banking firms. A total of 8 banks were observed with 216 data buckets for the period of their first 16 consecutive quarters of operations. Published financial statements of the banks investigated were drawn, summarized and analyzed. A descriptive analysis approach. The study reveals that de novo banks do maintain just the required regulatory capital in their start up and that they do not engage into lending activities in the beginning. On average, banks engage into serious lending on their sixth quarter. However, local banks engage into lending as early as second quarter of their market entry. Foreign banks suffer more losses in non-performing loans than the local banks during their first 16 quarters of their operations. In terms of capital investment, local banks operate with lower capital base than foreign banks. Foreign banks seem to attract fewer deposits as compared to the local banks though they seem to provide more attractive interest on deposits. The study provides significant contribution on the portfolio behavior of the de novo banks and comparison on ownership creates added value for foreign entry to the commercial banks in Tanzania.The paper also provides managerial insights on how to manage newly established banks and might guide investors on the return on their investment in newly established banks.

Browse

Browsing Department of Finance by Title

Results Per Page

Sort Options