Performance of rural and urban women owned small and medium enterprises in Tanzania: do socio-cultural factors matter

Abstract

Worldwide including Tanzania, urban and rural women owned Small and Medium Enterprises (SMEs) have shown differences in entrepreneurial capabilities. This study compares the performance between urban and rural women owned SMEs in Chamwino and Dodoma urban districts in Tanzania. A cross-sectional survey involving use of a questionnaire was administered to 240 respondents to collect quantitative data. Additionally, eight case studies were developed from qualitative data collected using in-depth interview. Independent samples t test was used to compare existence of differences in business performance between urban and rural women owned SMEs. Qualitative data were analyzed using content analysis. The findings show that business performance between rural and urban SMEs were statistically different (p < 0.01) whereas the mean score for the performance of urban women owned SMEs was 3.0 times that of their counterpart rural owned women SMEs. The findings further indicate that socio cultural factors such as low level of education, unbalanced family role, poor access to business information, absence of role models, poor financial control, poor access to credit; poor societal attitude and support were highly pronounced in rural areas. These findings imply that urban women owned SMEs are entrepreneurially more favoured than those in rural areas. Based on findings, the study concludes that differences in business performance between women owned SMEs are due to socio-cultural factors differences which exist between rural and urban business environments. It is recommended that such differences in socio-cultural factors need to be addressed through different entrepreneurial programmes such as training and mentorship.