RUAHA CATHOLIC UNIVERSITY

The purpose of this study was to determine the contribution of financial institution on small and medium enterprises development in Tanzania: A case study of SIFA SACCOS in Iringa Municipality. Specifically: to determine whether entrepreneurial skills provided by financial institutions contribute the development of SME`s, to determine whether management skills provided by the financial institutions contribute the development of SMEs and to determine whether proper financial records keeping contribute the development of SMEs. The study adopted a quantitative research approach and descriptive research design with a sample of 99 respondents. Data was collected using questionnaire and the data was analyzed using regression analysis and descriptive statistics. The research findings showed that the entrepreneurial skills, management skills and proper financial record keeping had a positive relationship with the development of small and medium enterprises (SMEs). It was established that entrepreneurial skills accounted for 22.22% of the development of SMEs, and management skills accounted for 33.33% of the development of SMEs and lastly proper financial record keeping accounted for 77.77% for the development of SMEs. The study therefore concluded that the contribution of financial institutions on SMEs development as supported by a significance value of 0.637 for proper financial record keeping, 0.790 for management skills and 0.680 for entrepreneurial skills. The study recommended that services offered by financial institutions to SMEs should be monitored and controlled as to avoid undesired effect in case either of the side has bad mission to other, this is due to the truth that one side (SMEs) is full of un educated personnel. The study also recommends that financial institutions should take relevant measures to ensure sustainability of the services they provide to SMEs

Financial Institutions, SMEs Development, SIFA SACCOS