Power rationing dilemma: a blow to small & medium enterprises (smes) performance in Moshi Municipality, Tanzania

Abstract

Small and Medium Enterprises (SMEs) experience several challenges in their operations including power fluctuation and power rationing which in return lead to low production, poor provision of services and low incomes. Based on that, the study generally aimed at assessing the impact of power rationing dilemma on the performance of SMEs. The study was undertaken by using a survey research design whereby purposive and random sampling techniques were used to pick a sample of 28 SMEs while questionnaires, interviews and documentary review were used to collect data. Data were analysed through applying interpretive and reflexive qualitative approaches while quantitative techniques involved utilisation of descriptive statistics, cross tabulation, correlation and linear regression models. Findings revealed that presence of power rationing results into decline in SMEs productivity as was hypothesised which in return led to poor performance due to inability to provide the required customer service level. Also, that a decline in productivity and loss of income are positively correlated because without products to sell SMEs are not getting business income. Therefore, it is concluded that power rationing has an impact on the performance of SMEs as it affects productivity, incomes and profits. Hence, it is recommended that SMEs should consider using alternative sources of power such as solar power, biogas, and where necessary share funds to buy power backup generators.