Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania

35 Pages Posted: 20 Apr 2016

See all articles by Josef Ludger Loening

Josef Ludger Loening

University of Goettingen (Gottingen) - Ibero-America-Institute for Economic Research

Tidiane Kinda

CERDI-CNRS, Université d'Auvergne

Date Written: July 1, 2008

Abstract

This paper analyzes characteristics of nonfarm enterprises, their employment growth patterns, and constraints in doing business in rural Tanzania. Using unique survey data, the authors describe a low-return sector struggling to compete in a difficult business environment. However, about one-third of rural enterprises are growing fast. Most enterprises engage in agricultural trade. Due to a rapidly growing agricultural sector in recent years, limiting demand-side constraints, rural enterprise constraints in Tanzania mainly operate from the supply side. This suggests that, in particular, access to finance, road infrastructure, and rural cell phone communication is correlated with employment growth. A major finding is that subjective and objective measurements of business constraints are broadly comparable. The authors discuss a number of factors that would help to unleash the full potential of private sector-led growth in rural areas. The findings show that marginal improvements in the rural investment climate matter for growth.

Keywords: Access to Finance, Rural Poverty Reduction, Microfinance, Banks & Banking Reform

Suggested Citation

Loening, Josef Ludger and Kinda, Tidiane, Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania (July 1, 2008). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2008. Available at SSRN: https://ssrn.com/abstract=1233051

Josef Ludger Loening

University of Goettingen (Gottingen) - Ibero-America-Institute for Economic Research ( email )

Oeconomicum II/99
Platz der Goettinger Sieben 3
Goettingen, 37073
Germany
+49 (551) 39-8172 (Phone)
+49 (551) 39-8173 (Fax)

HOME PAGE: http://www.iai.wiwi.uni-goettingen.de

Tidiane Kinda (Contact Author)

CERDI-CNRS, Université d'Auvergne ( email )

65 Boulevard Francois Mitterrand
Clermont-Ferrand, 63000
France

Register to save articles to
your library

Register

Paper statistics

Downloads
150
Abstract Views
748
rank
195,526
PlumX Metrics