Abstract:
This paper determined the effects of credit management practices on the
performance of women owned SMEs in Morogoro Municipality. Data were
collected from 120 women which included both credit and non-credit
recipients. A purposeful sampling procedure was employed to select the study
district and three wards whereby two streets were selected from each ward
randomly. The women’s respondents were then selected randomly from each
street. Descriptive analysis was used to compute the enterprise performance
status of the respondents. The results indicate that 55 percent of the women
respondents were credit beneficiaries while 45 percent were not. Among those
who received credit, 68 percent used the whole credit to invest in the same
business; about 21 percent used 50 percent of the credit received to invest in
other businesses besides the core ones and about 50 percent used the credit
in non-business purposes. Moreover, about 11 percent of the credit recipients
used the whole loan given (100%) in other activities such as family parties and
paying school fees. An independent t-test was run to determine whether there
is a significance difference in performance among women with and without
credits. The performance indicators were all significant in terms of asset value,
number of employees, monthly sales, and gross margin at p>0.05. The findings
show that credit availability influenced the performance of women owning
SMEs. The findings also show further that women who received credit and
AJASSS Volume 4, Issue No. 1, 2022 page 294
invest the whole of it in the same business were performing better compared
to non-credit recipients. It is therefore concluded that if credit is available
and women use the whole of it in investing within the business, their SMEs
performance will improve. It is recommended that women owning SME’s
should be encouraged to take the available credits which have competitive
interest rates and deploy it in their business in order to enhance performance
of their enterprises.
