Abstract:
The lack of capital has been identified by many researcher as the major cause of
failure among the small and medium building contractors in Tanzania in securing
valuable tenders from different clients especially government institutions.
The main objective of this study is to asses on how the financial institutions benefits
small and medium building contractors in Tanzania and proposed way forward to
improve services and products. The data collected from sample size of 15 and 90
respondents from financial institutions and building contractors respectively. The data
processed and analysed by SPSS to reflect clear understand of the findings.
The findings analyzed showed that there are many products and services offered by
financial institutions in Tanzania to its clients including building contractors.
However, the study found challenges associated with the accessibility of the
financial products and services from financial institutions. The challenges included;-
unfavorable government policy favoring SMBCS, stiff market competition, increase
of foreign contractors, lack of collateral/security pledge, lack of financial education,
insufficient working capital, delay of payments especially from the government as
well as lack adequate own equity to contribute in accessing the plants/equipment
finance. Products and services from financial institutions had both positive and
negative impact according to the evidences found in the study.
This study recommend the financial institutions to concerted efforts to raise
awarenes among SMBCS about the products and services provided and to review of
financial charges and interest rate to favor the local SMBC. Since, majority of
SMBCs has no collateral to secure loans from the bank. It is recomended by the
study for them to invest in non-moveble asset like lands and houses
