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

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.

Bibliographic Details

Main Authors:	Kinda, Tidiane, Loening, Josef L.
Language:	English
Published:	World Bank, Washington, DC 2008-07
Subjects:	ACCESS TO FINANCE, ACCESS TO FINANCIAL SERVICES, ACCESS TO FORMAL CREDIT, ACCESS TO MARKET, ACCESS TO MARKETS, ACCESS TO MONEY, ACCESS TO RURAL FINANCE, ACCESS TO SERVICES, ACCESSIBILITY, ACCOUNTING, AGRICULTURAL ACTIVITIES, AGRICULTURAL COMMODITIES, AGRICULTURAL GROWTH, AGRICULTURAL INCOME, AGRICULTURAL INPUTS, AGRICULTURAL PRODUCT, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTIVITY, AGRICULTURAL PRODUCTS, AGRICULTURAL SECTOR, AGRICULTURAL TRADE, AGRICULTURAL WAGE, AGRICULTURAL WAGES, BANK ACCESS, BANK LOAN, BANKS, BARRIERS TO ENTRY, BIASES, BRIBE, BUSINESS ACTIVITIES, BUSINESS ENVIRONMENT, BUSINESS EXPERIENCE, BUSINESS FAILURE, BUSINESS OPERATIONS, CALCULATIONS, CAPITALIZATION, COMMERCIAL FARMS, COMMUNITY GROUP, COMMUNITY LEADERS, CONFLICT, CONTRACT ENFORCEMENT, CONTRIBUTION, COOPERATIVE BANK, COOPERATIVES, CORRUPTION, COST INCREASES, DIVERSIFICATION, DROUGHTS, EARNINGS, ECONOMETRICS, ECONOMIC ACTIVITIES, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC REFORMS, EMPLOYMENT GROWTH, EMPLOYMENT INCOME, ENFORCEMENT MECHANISMS, ENTERPRISE DEVELOPMENT, ENTERPRISE GROWTH, ENTERPRISE SIZE, ENTREPRENEURIAL ACTIVITIES, ENTREPRENEURIAL ACTIVITY, ETHNIC GROUPS, EXCHANGE RATE, EXPANSIONS, EXPENDITURES, EXPORT CROPS, FAMILY MEMBER, FARM ENTERPRISE, FARM INCOME, FARM SECTOR, FEMALE ENTREPRENEURSHIP, FEMALE PARTICIPATION, FINANCE ACCESS, FINANCIAL CONSTRAINTS, FINANCIAL INSTITUTIONS, FINANCIAL SERVICE, FINANCIAL SERVICES, FINANCIAL SUPPORT, FIRM SIZE, FIRMS, FIXED ASSETS, FOOD CROPS, FOOD POLICY, FORMAL FINANCIAL SERVICES, GENDER, HOUSEHOLD BUDGET, HOUSEHOLD INCOME, HOUSEHOLD SURVEY, HOUSEHOLD WELFARE, HOUSEHOLDS, HUMAN CAPITAL, INCOME GROWTH, INCOME RISK, INCOME SOURCES, INFLATION, INTERNATIONAL BANK, INVESTMENT CLIMATE, INVESTMENT CLIMATE ASSESSMENT, JOB CREATION, JOB OPPORTUNITIES, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LACK OF ACCESS, LAWS, LIMITED ACCESS, LIMITED ACCESS TO FINANCE, MACROECONOMIC STABILITY, MACROECONOMIC STABILIZATION, MANUFACTURING ENTERPRISE, MARKET DEMAND, MARKET DEVELOPMENT, MARKET INFORMATION, MARKETING, MICRO-ENTREPRENEURS, MICROENTERPRISES, MICROFINANCE, MONEY LENDER, MONEY LENDERS, MONEYLENDERS, NATURAL RESOURCES, NEW BUSINESS, NEW BUSINESSES, OPERATING COSTS, POLITICAL ECONOMY, POOR, POOR ECONOMIC GROWTH, POOR PEOPLE, POVERTY REDUCTION, PRIMARY EDUCATION, PRIVATE BANKS, PRIVATE ENTREPRENEURS, PRIVATIZATION, PROPERTY RIGHTS, PROSPERITY, PUBLIC EXPENDITURES, PUBLIC INVESTMENTS, PUBLIC TRANSPORT, PUBLIC WORKS, QUESTIONNAIRES, RAPID GROWTH, REGRESSION ANALYSIS, RESEARCH ASSISTANCE, RURAL, RURAL AREA, RURAL AREAS, RURAL BUSINESSES, RURAL DEVELOPMENT, RURAL ECONOMY, RURAL EMPLOYMENT, RURAL ENTERPRISES, RURAL ENTREPRENEURS, RURAL FINANCE, RURAL FINANCIAL INSTITUTION, RURAL FINANCIAL INSTITUTIONS, RURAL HOUSEHOLD, RURAL HOUSEHOLDS, RURAL INCOME, RURAL INVESTMENT, RURAL LABOR, RURAL LABOR MARKET, RURAL MARKET, RURAL POOR, RURAL POPULATION, RURAL POVERTY, RURAL POVERTY REDUCTION, RURAL SERVICES, RURAL TOWNS, RURAL TRADE, RURAL WAGES, SALE, SALES, SALES GROWTH, SALES REVENUE, SALES REVENUES, SECONDARY EDUCATION, SELF-EMPLOYMENT, SMALL BUSINESS, SMALL ENTERPRISE, SMALL ENTERPRISES, SMALL FIRM, SMALL FIRMS, SOCIAL SERVICE, SOURCE OF INCOME, SOURCES OF INCOME, START-UP, START-UP CAPITAL, START-UPS, STATE OWNED ENTERPRISES, STATISTICAL ANALYSES, SUB-SAHARAN AFRICA, TAX CONSTRAINTS, TAXATION, TRANSACTION, TRANSACTION COSTS, TRANSITION ECONOMIES, TRANSPORT, TRUST FUNDS, URBAN AREAS, URBANIZATION, VILLAGE, VILLAGES, WOMAN,
Online Access:	http://documents.worldbank.org/curated/en/2008/07/9698351/small-enterprise-growth-rural-investment-climate-evidence-tanzania https://hdl.handle.net/10986/6824
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