DECLARATION

I Frank Martin Kajembe, solemnly declare that this research proposal report is based on my own
work carried out during the course of our study. I assert the statements made and conclusions
drawn are an outcome of my research work.

I further certify that the work contained in the report is original and has been done by me under the
general supervision of my supervisor and this research work has not been submitted to any other
Institution for any other degree/diploma/certificate in this university or any other.

Furthermore, I have followed the guidelines provided by the university in writing the report and
whenever I have used materials (data, theoretical analysis, and text) from other sources, we have
given due credit to them in the text of the report and giving their details in the references.

Kajembe, Frank M

IMC/MFI/2013502

………………….

i
 ACKNOWLEDGMENT
It is virtually impossible to come up with a research report such as this, particularly considering its
demands such as obtaining information about the challenges facing small scale retailers in
Kigamboni Municipal and completing in time without the assistance of other people. To this end
therefore, many acknowledgements go to the individuals and groups who were instrumental to the
success of this report.

First and foremost, I would like to express my gratitude to the Almighty God for giving me good
health and ability to undertake my project to the completion because all became possible only for
his amazing grace.

I am indebted to my lovely mothers Mrs. Maria Gideon Magehema for giving me life in the first
place, for educating me up to this level where I am and for the unconditional support both
materially and financially and encouragement to pursue my interests, even when the interests went
beyond boundaries of language, project and financial.

I am also gratefully to the entire staff of Kigamboni Municipal for their approval of my request of
conducting the research study in their wards. A word of appreciation goes to all the staffs, for their
kindness and co-operation. May God bless them all.

Institute of Finance Management staffs are gratefully thanked in advance for equipping me with
the knowledge I employed in this report’s preparation. I highly appreciate their effort in giving me
more details concerning research writing since it is my first time undertaking it as a student.

Lastly, I would like to acknowledge the efforts and great support provided by my friends and my
fellow colleagues for their encouragement, I cannot mention each and every one here but may
almighty God bless them all in a kind way.

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 TABLE OF CONTENTS
DECLARATION.................................................................................................................................i

ACKNOWLEDGMENT.....................................................................................................................ii

CHAPTER ONE.................................................................................................................................1

INTRODUCTION...............................................................................................................................1

1.1 Background of the study...........................................................................................................1

1.2 Statement of the Problem..........................................................................................................1

1.3 Objectives of the Research........................................................................................................2

1.3.1 General Objective...............................................................................................................2

1.3.2 Specific Objectives.............................................................................................................2

1.4 Research Questions...................................................................................................................3

1.5 Significance of the Study:.........................................................................................................3

1.6 Scope of the Study....................................................................................................................3

1.7 Organization Structure of the Study..........................................................................................4

CHAPTER TWO................................................................................................................................5

LITERATURE REVIEW....................................................................................................................5

2.0 Introduction...............................................................................................................................5

2.1 Definition of Key Terms...........................................................................................................5

2.1.1 Retailers..............................................................................................................................5

2.1.2 Small-Scale Retailers.........................................................................................................5

2.1.3 Business Operations...........................................................................................................7

2.2 Theoretical Literature Review...................................................................................................7

2.2.1 Psychological Theories......................................................................................................7

2.2.2 Ansoff Matrix Model.........................................................................................................7

2.2.3 Economic Theories.............................................................................................................8

2.2.4 Pecking Order Theory........................................................................................................8

2.3 Empirical Literature Review.....................................................................................................9

2.4 Research Gaps.........................................................................................................................13

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 2.5 Conceptual Framework...........................................................................................................13

CHAPTER THREE...........................................................................................................................15

RESEARCH METHODOLOGY......................................................................................................15

3.0 Introduction.............................................................................................................................15

3.1 Research Design......................................................................................................................15

3.3 Target Population, Sample Size & Sampling Technique........................................................16

3.3.1 Target Population.............................................................................................................16

3.3.2 Sample Size......................................................................................................................16

3.3.3 Sampling Techniques.......................................................................................................17

3.4 Methods of Data Collection....................................................................................................18

3.4.1 Questionnaires..................................................................................................................18

3.4.2 Interview..........................................................................................................................19

3.5 Data Processing and Analysis.................................................................................................19

3.6 Validity and Reliability...........................................................................................................19

3.6.1 Validity.............................................................................................................................20

3.6.2 Reliability.........................................................................................................................20

3.7 Ethical Issues...........................................................................................................................20

3.8 Research Budget and Work Plan.............................................................................................20

REFERENCES..................................................................................................................................22

APPENDIXES..................................................................................................................................23

Appendix I: Questionnaire............................................................................................................23

Appendix II: Interview Checklists................................................................................................26

Appendix III: Research Budget.....................................................................................................27

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 CHAPTER ONE

INTRODUCTION

1.1 Background of the study

According to Schaper and Vollery (2004:89) there is no single definition of what constitutes a
small business, and a variety of both qualitative and quantitative factors may be used to separate
small firms from other businesses. From a qualitative perspective, the business has to be
independently owned and operated, closely controlled and funded by the owner, and the principal
decision-making function must rest with the owner-manager. In addition, the small business can be
defined using a variety of quantitative indicators, such as the number of employees, value of assets,
turnover, and share of ownership retained by the owner-manager.

Small-scale businesses are the backbone of virtually all economies of the world because of their
role in employment creation and provision of personalized services. Small-scale businesses have
strong influence on the sustainable development process of less developed as much as developed
countries because they foster economic growth and alleviate poverty. Udechukwu (2003) asserts
that the development of small-scale business is an essential element in the growth strategy of most
economies and holds particular significance for developing countries like Tanzania.

Most governments, especially in Less Developed Countries (LDCs) now recognize the need to
formulate policies that create conducive atmosphere for the establishment and operation of small-
scale businesses. The new emphasis by various governments in LDCs on SME development can be
linked with the current global trend of economic liberalization and the need to bridge the
development gap that exists between them and industrialized countries.

1.2 Statement of the Problem

Despite the role of small-scale retailers in the economy, the financial constraints they face in their
operations are daunting and this has had a negative impact on their development and also limited
their potential to drive the national economy as expected.

According to the Small and Medium Enterprise Development Policy of 2003, it shows that there
are opportunities indicating a bright future for SME sector development in Tanzania. This includes

1
the various on-going reforms that are oriented towards private sector development and, thus, lay
the ground for SMEs development.

In addition, the recognition of SME sector that it has higher potential for employment generation
per capital invested attracts key actors to support SME development programme. Since SME
development does contribute significantly to poverty alleviation, resources earmarked for poverty
alleviation will also be availed to the SME sector.

Most of the papers done in this field have not clearly shown the financial impacts on the
development of small-scale retailers, and further it has not provided any solution to the small-scale
retailers on the cheaper sources of finance. On the other side, the success of any business operation
largely depends on the environment it operates. Previous researchers have not dig dipper to
evaluate the relationship between the business operations and the environment.

Furthermore, I have not come across research that clearly stipulates the required trainings that will
equip the small-scale retailers with professional knowledge and expertise to employ in their
business operations, thus cause most of them to fail as they are being conducted very traditional.
Moreover, due to concentration of many individuals in business operations, there have been
increasing needs of training regarding the marketing strategies that will be essentials for the
success of many business operations.

1.3 Objectives of the Research

1.3.1 General Objective
To assess the challenges facing small-scale retailers on business operation in Kigamboni Municipal

1.3.2 Specific Objectives

i. To establish how financial problem affect small-scale retailers on business operations in
Kigamboni Municipal.
ii. To determine how permanent settlement affect small-scale retailers on business operations
in Kigamboni Municipal.
iii. To examine how mode of trainings affects small-scale retailers on business operations in
Kigamboni Municipal.
iv. To determine the effects of marketing strategies employed by small-scale retailers on their
business operations in Kigamboni Municipal.

2
1.4 Research Questions
In order to address the above stated problem, the following research questions are essential; hence
they are reflected in the questionnaire.
i. Does the government provide conducive environment for small-scale business?
ii. Do the small-scale retailers have access to cheap finance options from the financial
institutions?
iii. Do the small-scale retailers possess the skills and competence to run their business
operations?
iv. Do the small-scale retailers employ marketing strategies in their business operations?

1.5 Significance of the Study:

Information gathered from this study can be very helpful and used as a reference by other
researchers that will be interested to conduct a study in this area, as it will provide them the basis
for which further research could be conducted. Furthermore, it can be used as a paper to be read by
graduates from different higher learning institutions, as a solution to the unemployment problem as
it will provide them with some vital information concerning strategies for small-scale business
survival.

Moreover, the small-scale retailers can also benefit from this work for planning of various
appropriate measures for business growth and survival as well as the effective allocation of
resources. Lastly, but not least I believe that this research study will be of great use to general
public by expanding their knowledge on small-scale business operations.

1.6 Scope of the Study

The study focuses on the challenges facing small scale retailers in their business operations at
Kigamboni Municipal. As such it analyzes the problems facing the small-scale retailers who are
considered as engine of economic growth and promotion of equitable development. Similar to Hart
and Simanis (2008), this research makes use of the term ‘base’ and not ‘bottom’ as referred to in
some research, given the negative connotations attached to the latter term. This is a comprehensive
study of all small-scale retailers in Kigamboni Municipal.

3
1.7 Organization Structure of the Study
This study is arranged into three chapters, whereby the first chapter introduces the topic by
explaining the background, statement of the problem, research objectives and questions and later
shows the significance and scope of the study. The second chapter defines the key concepts and
later on reviews the theoretical and empirical literature before analyzing the research gap and
showing the conceptual framework.

The third and last chapter of this proposal analyzes how the research will be conducted by showing
the area of study and particularly the target population, the sample size to be taken and the
sampling technique to be employed. Further it explains the data collection methods to be used and
the data processing analysis tools to be employed. Lastly, it describes how the validity and
reliability concern will be addressed, the ethical considerations and lastly the research budget and
work plan of the study.

This study also incorporates the references of some materials and literatures cited by other
academicians who conducted a study similar to this. Also, it has appendixes of questionnaires to be
spread and the interview checklists of key points to adhere during the data collection method. And
lastly a brief description of the research budget to be incurred in the whole process of conducting
this research.

4
 CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction
According to Saunders, Lewis and Thornhill (2000:44) the literature review forms the framework
for research, as it helps to develop a good understanding and to provide insight into relevant
previous research and emerging trends. Based on key points drawn from the literature review, the
author will present the reader with some background knowledge of the research questions and
objectives. This will enable the reader to place the research in this paper in context with regard to
previous research on the subject.

2.1 Definition of Key Terms

There are various types of small-scale retailers basing on their daily operations; some of them are
as follows
2.1.1 Retailers
A retailer is a person or businesses that sells goods to the public in relatively small quantities for
use or consumption rather than for resale. Retailers basically do not manufacture their own items;
they purchase goods from manufacturers or wholesalers and sell those goods to consumer in
smaller quantities.

2.1.2 Small-Scale Retailers

These are retailers whose capital is requirement is low and their sales volume is low. They form the
majority of retail traders and all found in all parts of the country. Small Scale businesses are easy to
start and, in most cases, they are operated as one-man’s business. A small-scale trader serves the
needs of the people in the immediate neighborhood and deal mainly in fast moving goods such as
foodstuffs, detergents, telecom utilities and others.

Small-scale retailers may be classified in various categories but the most common aspect is those
with shops and those without the shops. Small-scale retailers without shops include the itinerant
traders, i.e., hawkers and peddlers, roadside sellers and Open-air market traders.

5
 i. Itinerant Traders: -
These are small-scale retailers that move from place to place selling their goods either on foot,
bicycles or motorcycles. They move from town to town, door to door, village to village selling
their goods. Their goods may include clothes, utensils and food staffs. Customers can buy their
goods without having to travel to look for them.

ii. Roadside Sellers: -

These are traders who sell their goods at places where other people pass and at busy places along
busy roads, bus stations, road entrances and entrance to public buildings. They place their goods on
trays, cardboards, empty sacks and some hardware. They sell items such as fruits, ice creams,
sweets and drinks.

iii. Open Air Market Traders: -

Open-air markets are places set aside by the government through the local authorities where people
meet to buy and sell goods. Traders selling similar commodities are allocated a special place. Such
markets are open on particular days of the week. The varieties of goods sold here include
agricultural produce, clothing, household items, foodstuffs, etc.

On the other side, there are small-scale retailers with permanent location to operate. They include
kiosks, single shops sometimes referred to unit shops, tied shops, canteens, mobile shops.

i. Kiosks
These are small shops or structures found mostly in residential areas, busy streets, high-populated
areas or inside building where people pass or work. They in deal in fast-moving items and
groceries such as soda, cakes, sweets, cigarettes, and newspaper, etc.

ii. Single Shops (Unit Shops)

These are shops that are mostly located in the trading or market centers in rural areas or the
residential areas of high towns. They are operated from fixed premises. One person who may get
assistance from his/ her family or employ attendance usually runs them. Some deal in one line of
commodity such as households, clothing, drinks, groceries, electronics, etc.

iii. Canteens
These are retail shops found in institutions such as schools, colleges, hospitals, and army barracks.
They stock a variety of consumable goods such as sodas, breads, cakes, bites, tea, groceries, and
other things used by the people in that institution.

6
2.1.3 Business Operations
This refers to activities that businesses engage in on a daily basis to increase the value of the
enterprise and earn a profit. The activities can be optimized to generate sufficient revenues to cover
expenses and earn a profit for the owners of the business. Houghton (2017)

2.2 Theoretical Literature Review

In accordance with theoretical literature review, different theories related to this study are going to
be reviewed to see how these theories are related to the topic under the study by seen what other
academicians, small-scale retailers, different writers and stakeholders have been saying on
regarding to the challenges on the performance of small-scale retailers.

2.2.1 Psychological Theories

Hall (1957) in the book ‘Theories of Personality’ describes on psychological theory of
entrepreneurship that focuses on the individual and the mental or emotional elements that drive
entrepreneurial individuals. A theory put forward by psychologist David McClelland, argues that
entrepreneurs have a need for achievement that force their activity. Julian Rotter (1966), professor
emeritus at the University of Connecticut, clarifies a locus of control theory. Rotter’s theory holds
that people who have strong internal locus of control consider their actions as influence to the
external world and research suggests that most entrepreneurs possess peculiarity. The final
approach, however it is unsupported by the research, suggests personal traits ranging from
creativity and flexibility to optimism drive entrepreneurial behavior.

In developing the business, every individual has the psychological traits that push him or her to
engage in a business. Internal locus of control, need for achievement and risk-taking propensity are
among the reasons to people creating entrepreneurial cooperatives hence establishing their own
ventures. Consequently, the study examined socio-cultural related challenges in an individual and
the emotional elements that drive entrepreneurs in initiating business in a cooperative way.

2.2.2 Ansoff Matrix Model

An Ansoff Matrix; sometimes referred to as Ansoff Growth Matrix proposed that product
marketing strategy was a joint work of four growth areas: market penetration, market development,
product development, and diversification.

7
The theory is often illustrated in a product-market development matrix, originally created by
Ansoff in 1956. There are varieties of versions for this matrix that for example include process
development and/or differentiate between market developments alternatives i.e., entry in new
geographic market vs. in new customer segments. There are reasons to believe that the tactical
situation of the company and the resulting motives and purposes for business development
influence the good looks of the dissimilar alternatives in the matrix (Ansoff, 1958). For example,
intensive competition can lead cooperation to enter into new geographical markets (Slevin &
Covin, 1997) or to develop novel products that enable entry into a more promising industry (Jolly
& Kayama, 1990).

So far, the model is adapted so as to show much clearer on the way entrepreneurs can switch from
one market/product to others due to different business changes. However, the theory of Ansoff is
much challenging to entrepreneurial cooperatives since it needs the company that already operates
in a long-run business. The model has been adapted due to the fact that it is applicable to some
extent as some cooperatives try to follow these growth areas of Ansoff and it enables entrepreneurs
identify growth opportunities based on new and existing markets/products.

2.2.3 Economic Theories

Kruja (2003) has analyzed the economic entrepreneurship theories. Economic Entrepreneurship
theories date back on 1700s with the work of Richard Cantillon, who introduced the idea of
entrepreneurs as risk takers. The classic, neoclassical and Austrian Market course schools of
thought all pose clarifications for entrepreneurship that focal point for the most part, on economic
conditions and the opportunities they create.

There are various opportunities that entrepreneurial cooperatives try to create by considering
different economic conditions in their areas. Though, these conditions can be used as opportunities
rather, sometimes entrepreneurs encounter the challenges. Such those challenges affect them
economically. Hence, the study will examine how entrepreneurs be the risk takers focused on
economic-based challenges.

2.2.4 Pecking Order Theory

Business financing theory is a procedural pipeline on how to capitalize the business. It includes
three different means a venture can address to back its business to achieve development and
advancement so far as that is concerned. They incorporate internal sources which is financing using
own money from individual investment funds without being subject to take care of anybody. Aside
from that, the other type is debt financing particularly when internal sources are constrained and
8
for the most part done through accessing loans from lending entities, which is not the situation to
most SMEs.

External equity may also be employed where necessary though in most cases businesses tend to
prefer most internal equity and leverage as forms of financing in facilitating capital structure of the
businesses (Levy & Hennessy, 2007). The practices are well embedded within enterprises in
different jurisdictions whereas at first investors start with own sources from savings and boost from
their close allies such as spouses, family members, relatives, friends and other. Later on, the need
for expansion increases and internal equity is limited they resort to leverage as the other form of
financing.

This theory was significant to the research provided that small scale retailers as business entities
require adequate capital structure whereas internal equity though enterprise own sources is usually
limited as in the long span the entities must move to lending entities to access finance from them
(Bradley, 1984).

2.3 Empirical Literature Review

Fatoki & Asah, (2011) conducted a study on how SMEs formal planning is important on
determining the appropriate required amounts of external finance to be outsourced as well as
important criteria used by commercial banks in evaluating loan proposals raised by SMEs. SMEs
that have not been able to develop and provide formal business plans and formal financial plans
have been facing difficulties in securing external financing from commercial banks. Due to this,
little focus was provided to enterprises in Dar es Salaam and this provides the need to establish
further studies.

Various research has been conducted on SMEs challenges in various sectors. Debt financing access
by SMEs on gender perspective was performed in Ghana with the aim to compare the access
between enterprises owned by men and those owned by women (Abour & Biekpe). The findings
indicated that the access to finance has been limited whereas with the comparison, the lending
entities grant anyone with assurance of paying back on time and not defaulting whether is a man or
a woman though statistically women have been seen to be better in fostering returns than men
(Backman, 2019). Regardless of that, it signifies the undertaking of the study in Tanzania since
little studies have been conducted on finance access towards SMEs to address the issue.

Afolabi (2013) stated that a major gap in Nigeria’s industrial development process in the past years
has been the absence of a strong and virile small and medium enterprises sub-sector (SMEs) owing

9
to financial constraints explained by high lending rates, high loan requirements and lack of viable
entrepreneurial skills. He added that lack of adequate credit for SMEs, traceable to the reluctance
of banks to extend credit to them among others; to poor documentation at project proposals as well
as inadequate collateral by SME operators constitute one of the problems facing SMEs in Nigeria

Schaefer (2006) supports what Radipere and Van Scheer (2005) have asserted when he states that
many a report on business failure cites poor management as the number one reason for failure.
Schaefer (2006) go on to state that new business owners frequently lack relevant business and
management expertise in areas such as finance, purchasing, selling, production, and hiring and
managing employees. Unless they recognize that they have not done well and seek help, they could
face disaster.

Nkonoki (2010) conducted a study in Tanzania on factors limiting the success and/or growth of
small businesses and found that in Tanzania small businesses contribute significantly to
employment creation, income generation and stimulation of growth in both urban and rural areas.
However, according to Dinka (2019), it is not easy to bring sustainable growth and benefit from
small business sectors until critical challenges are identified and solved.

Therefore, for small business to bring profitability, there are potential challenges which must be
overcome. This study therefore deals with marketing challenges, financial challenges and
technological challenges that may hinder growth of small-scale businesses in Tanzania.

According to National Baseline Survey Report (2012), there are more than three million small
businesses in Tanzania, most of which are engaged in trade and service sectors. The manufacturing
sector, which is a core driving force for industrial development, accounts for only 13.6%. Another
distinctive feature of the sector is a huge number of informal operations. This situation suggests
that there is a lot to be done in the sector to make its vibrant contributor to the economic and social
wellbeing of Tanzanians. According to Citizen Reporter (2015), however, most of the micro
enterprises in the country collapse before they start making profit due to lack of financial support.

Ofriyie (2015) conducted research on finance problem affecting the growth of small-scale retailers
and explain that financial sustainability is a situation when institutions cover all transaction costs
with return on equity and consequently functions without subsidies. The main objective of the
business is to maximize profit and to minimize costs to avoid unexpected risks. Borrowing of loan
and equities in the small business covers business operating activities. Small business should own
their assets at optimal level not too much on debts and not too much on equities. Optimal debts of

10
assets should be ratio not too much or hanging without working. Therefore, shareholder and owner
of the business should manage dividend of the business.

Pollinger (2007) in his finding revealed that Capital is an important factor for an enterprise to run
day-to-day operations, an investment to support financial sustainability and the business to grow.
According Bush (2016), lack of enough capital is one of key challenges that may face small
business sector. With this regard, Bush recommends that small business persons must struggle to
maintain enough capital for running their business smoothly. Okpara (2011) and Muharremi (2011)
who link financial constraints with lack of sustainable capital.

Finally, he identified lack of access to financing and long-term capital as the most important
factors that hinder the success of small businesses. Significance of sustainable capital in small
businesses is further brought to view by Meher and Ajibie (2018) who maintain that the financial
sustainability depends on long term financial position which is an important indicator of financial
performance.

Schaefer (2006) conducted research on Small Business operation in the country and revealed that
Location is critical for the success of the business. Whereas a good location may enable a
struggling business to ultimately survive and thrive, a bad location could spell disaster to even the
best managed enterprise. Suggests that other factors that should be considered under location are
Where one’s customers are, Location of competitors, Condition and safety of the building, Local
incentive programmers for business start-ups in specific targeted areas and the history, community
flavor and receptiveness to a new business at a prospective site.

Marais (1997) indicate that rapidly changing circumstances require ongoing training at all levels of
the organization. Private and public organizations, as well as SMEs, should receive regular
training. Kroon and Moolman (1992) note that training can help owners/managers learn how to
approach certain problems, in order to save time and money and to be aware of certain rules and
procedures that could help them to work with fewer difficulties. Useful categories of training might
include motivational, business and entrepreneurial training (Ladzani & Van Vuuren, 2002).
Despite this broad range of possibilities, many training institutions conduct training in only one
area. Institutions that mainly focus on business skills (management training) or on motivational
skills and offer very little on entrepreneurial skills do a disservice to the SME sector they serve.

11
Israelstam (1997) revealed that small scale training forms part of the cornerstone of a supportive
environment, as it equips small business owners/managers with the skills necessary to drive
successful new venture creation, and contributes towards the survival and growth of small
businesses. One training perspective is that failure can be avoided by exploring the circumstances
from which failure arises. An awareness of possible problems facing entrepreneurs in the future
will enable them to be forewarned and proactive in their decision-making. Starting a business is a
risk at best, but the chances of success are enhanced if the problems anticipated are understood and
addressed prior to the business starting or the problem arising.

Mukab (2013) conducted research on small business management exposed those small businesses
face various challenges especially in areas of marketing, accounting, finance and management.
Also explain marketing is a tool for small business growth. Therefore, attending seminar/
workshop about marketing strategies helps the business to attract potential customers who purchase
regularly. A small business owner therefore requires good marketing approaches involving
purchasing activities, manufacturing the products, distribution and sales skills for business growth
and performance. Capabilities required for business growth can be summarized in terms of
marketing, management and profit.

Abada (2015) conducted a study in Algeria on establishing the factors affecting the growth of small
and medium-sized enterprises and found that marketing skills are considered as the most effective
factor to firm survival and growth.

Brush (2016) conducted a study on pathways to entrepreneurial growth with emphasis on the
influence of management, marketing, and profitability. In this attempt, they defined growth of a
business as geographical expansion, increase in the number of branches, inclusion of new markets
and clients, increase in the number of products and services, fusions and acquisitions.

Kazimoto (2018) conducted a study in Tanzania on factors affecting small businesses’ performance
and found that during the early stages of starting business many owners commit themselves to
taking sources of finance they have available to them. The best source of finance to small business
is family and friend’s contributions, personal income or individual contributions from their
pockets, loans, grants, partnership and donations.
12
2.4 Research Gaps
A survey of different studies such as conducted on small business management exposed those
small businesses face various challenges especially in areas of marketing, accounting, finance and
managements. And has been done thus gaps related to time which research was conducted and
respondents have been observed in conducted this study is intending to fill.

However, most of the papers done in this field have not clearly shown the financial impacts on the
development of small-scale retailers, and further it has not provided any solution to the small-scale
retailers on the cheaper sources of finance.

On the other side, the success of any business operation largely depends on the environment it
operates. Previous researchers have not dig dipper to evaluate the relationship between the business
operations and the environment. Clear distinction should be available to show the conduciveness of
the environment that favors business operations to be conducted smoothly.

Furthermore, I have not come across research that clearly stipulates the required trainings that will
equip the small-scale retailers with professional knowledge and expertise to employ in their
business operations, thus cause most of them to fail as they are being conducted very traditional.
And hence due to concentration of many individuals in business operations there have been
increasing needs of training regarding the marketing strategies that will be essentials for the
success of many business operations.

Lastly, previous researchers have not clearly identified the proper marketing strategies that small
scale retailers should employ in the business so as to improve the performance of their business
operations. Marketing Strategies should be identified, analyzed and establishment of centers of
training the small-scale retailers.

2.5 Conceptual Framework

In Tanzania, people’ productive activities are concentrated in entrepreneurship, i.e., establishing
the ventures as retail trade, manufacturing and periodic market trade. Regardless of the numerical
superiority of entrepreneurs in cooperate entrepreneurship; there are challenges that face business
development in making market profitability.

13
INDEPENDENT VARIABLES DEPENDENT VARIABLES

Financial Problems
 Insufficient Capital
 Lack of Access to Credit
 Cash Flow Shortages
 Unforeseen Business Expenses
 Government Taxes

Marketing Strategies
 Lack of Sufficient Budget
 Lack of Marketing Expertise
 Failure to Identify Target Market Segment
 Lack of Product Branding and Advertisement
 Lack of Exposure
Business Operations
Mode of Trainings
 Lack of Funds to Acquire Necessary Trainings
 Poor Technology
 Ignorance
 High Costs Associated with Training
 Time Consuming

Permanent Settlement
 High Costs of Occupying Land / Premises
 Poor Government Planning
 High Concentration in Potential Areas
 Ignorance

14
 CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction
Leedy (1993) describes research as the systematic process of collecting and analyzing information
in order to increase our understanding of the phenomenon with which we are concerned or
interested. He further suggests that it involves the interpretation of data to draw conclusions.

The aim of research methodology is to produce reliable and valid data that is free from personal
biases and other errors. This involves measurement that must be both reliable and valid. (Cooper
and Schindler, 2003). Leedy (1993) defines research methodology as the approach by which the
meaning of data is extracted and is a continuous process. The research methodology gives the
direction to follow to get answers to issues that are of concern in research.

This chapter introduces and describes the research design and methodology, which was used to
carry out the study. It outlines the sampling design technique that was used to select the sample of
the study. It also outlines the method, technique and tools, which were used to collect the data and
how the data collected, were analyzed. The chapter further describes the population of the study
from which the sample was selected and the types of data and how it was collected. The study
relied on the data obtained from the small-scale retailers in Kigamboni Municipal.

3.1 Research Design

A research design is the arrangement of conditions for collection and analysis of data in a manner
that aims to combine relevance to the research purpose with economy to procedure (Kathori,
1985). The research design according to cooper and Schindler (2003) provides answers to issues
such as, techniques to be used to gather data, the kind of sampling strategies and tools to be used
and how time and cost constraints would be dealt with.

The research design of this study will be descriptive, designed to gather data from different small-
scale retailers in the different wards of Kigamboni Municipal in order to establish the challenges
facing small scale retailers.

15
3.2 Area of Study
This study will be descriptive and will be designed to gather data from different small-scale
retailers in the different wards of Kigamboni Municipal in order to establish and determine the
major challenges facing small scale retailers.

Kigamboni (officially Kigamboni Municipal Council) is a district of Dar es Salaam, Tanzania. The

Kigamboni District is divided into nine administrative wards which are Tungi, Vijibweni, Kimbiji,
Kisarawe II, Kigamboni, Mjimwema, Kibada, Somangila and Pemba Mnazi.

According to the Population and Housing Census of the year 2012 the Kigamboni Municipal
Council had a total population of 162,932 where 81,199 were males and females were 81,733. The
population projection for the year 2018 is 225,938 where males are 112,597 and females are
113,341 at 5.4% annual growth rate. Kigamboni, Vijibweni and Mjimwema wards have relatively
large population sizes compared to other wards. Kisarawe II has the least population compared to
other wards. According to 2019 population projections, Kigamboni Municipal is expected to have a
total population of 238,591 with 118,905 males and 119,686 females.

3.3 Target Population, Sample Size & Sampling Technique

3.3.1 Target Population
The target population for this study consisted of all small-scale retailers of 4 administrative wards
as of the Kigamboni Municipal which are Mjimwema, Kigamboni, Tungi and Vijibweni. Many
people employ entrepreneurial skills due to the various business opportunities available.

The researcher picked on the area for study purposely because he had known the area for the last
five years residing in Kigamboni Municipal. He therefore had immense knowledge about the
region and the targeted respondents. The researcher targeted to study 100 small scale retailers’
business operations to identify their challenges.

3.3.2 Sample Size

Sample size is the specific number of items to be selected in the sample from where by the targeted
population or total population which the researcher will use (Campbell 2020).

The sample of this research is calculated by using Taro Yamane (Yamane, 1973) formula with
90% confidence level, and hence the degree of allowable error is 10%. Kigamboni Municipal

16
Council is estimated to have small scale retailers estimated to be 10,000 as per the district official
report 2012.

The calculation formula of Taro Yamane is presented as follows.

N
n=
1+ N ¿ ¿

Where n = Sample size required,

N = Number of People in the Population
E = Allowable error (%)

Table 3.1 Showing the Sample Distribution in the Population of Small-Scale Retailers
S/N Categories of Respondents Population Sample Size

1 Mjimwema 27,789 25
2 Kigamboni 30,496 28
3 Tungi 23,380 21
4 Vijibweni 29,010 26
Total 110,675 100
Source: researcher initiated (2022)

110675
Sample Size (n) =
1+ 110675¿ ¿

After calculating the sample size by substituting the numbers into the Yamane formula, the
numbers of sample are 99.90973 persons. In order to obtain reliable of data, researcher has
increased sample size to 100 persons

3.3.3 Sampling Techniques

Sampling is an important aspect of research. A sample is defined by Somer (2003) as a subject of a
population while sampling refers to the selection of a subject of cases from some population of
interest.

Thus, sampling is a systematic process of selecting a number of individuals for a study to represent
the larger group from which they were selected. Demcing, (1975) defines sampling as the selection
of a subset of the population. Chandran (2003) pursues this further by saying that, a sample method

17
is a way of selecting a portion of population such that the selected portion represents the population
adequately.

There are two main methods of sampling; probability and non - probability sampling (Kathori,
1998) - in probability sampling, each member of the population has an equal and known
probability, of being selected.

In non-probability sampling, members are selected from the population in some nonrandom
manner. Non -probability technique includes convenience sampling, judgement sampling, quota
sampling, and snowball sampling.

In this study, the researcher used non-probability sampling method. The non - probability sampling
technique used was purposive and convenience - sampling technique. Convenience sampling is the
selection of the study units from the population based on easy accessibility or specialized
knowledge of the researcher. It involves choosing the nearest and most convenient dealers as
respondents. The process was continued until the required sample size was realized (Robinson,
2002).

3.4 Methods of Data Collection

Primary data collection approach was adopted in this study to gather direct information from the
field. It was conducted since the information to fill the study gap was mainly gathered from the
respondents obtained from the field. Meanwhile secondary sources were adopted in discussion of
findings part to relate with research objectives and questions to be addressed. They comprised of
the information that were obtained from various recognized reviews such as the books, journals
and articles and other relevant sources useful for acknowledging facts including policy document.

3.4.1 Questionnaires
In order to collect data on the challenges facing small scale retailers, the questionnaires will be
administered to respondents. Babbie (1989) observes that questionnaires are more appropriate
when addressing sensitive issues, especially when the survey offers anonymity to avoid reluctance
or deviation from respondents like in small scale enterprises sector study. The researcher chose to
use questionnaires because they were regarded as the most appropriate. Questionnaires (Appendix
I) can be administered to a large number respondents at the same time and ensure uniformity from
one measurement to another due to the impersonal nature.

And since this study investigated causal relationship between the variables’ structured
questionnaires were employed for collecting data. The questionnaires consisted of questions that
18
generated quantifiable data using the Likert scale. This was used because it could be easily
generating tables. In that case, the scale was in five categories ranging from strongly agree to
strongly disagree.

3.4.2 Interview
Interviews provide in-depth information about a particular research issue or question. Because the
information is not quantifiable, the interview often is described as a quantitative research method.

Interviews are particularly useful for getting the storm behind respondent’s experiences. The
interviews can pursue in-depth information around the topic and are useful as follow - up to
respondents to questionnaires or further investigate their respondents to questionnaires or further
investigate their responses (McNamara, 1999).

Particularly the study will use the key information of interview with the help of checklist
(Appendix II) proposed. The key information from this study will be obtained from the Municipal
Business Officer(s) and the Ward Executive Officers of Mjimwema, Tungi, Vijibweni and
Kigamboni.

3.5 Data Processing and Analysis

This part presents data, analyzes and discusses findings on challenges facing small scale retailer on
business operation. Before processing the responses, the completed questionnaires will be edited
for completeness and consistency. The study generated quantitative data which was coded and
entered into Statistical Packages for Social Scientists (SPSS) and analyzed using descriptive
statistics.

Descriptive statistics involves use of absolute and relative (percentages) frequencies, measures of
central tendency and dispersion (mean and standard deviation respectively). Quantitative data was
presented in tables and explanation in prose. In addition, the study conducted a multiple regression
analysis.

This provided the generalization of the findings on impact of behavioral biases on investment
decisions in Tanzania.

3.6 Validity and Reliability

Patton (2001), states that validity and reliability are two factors, which any qualitative researcher
should be concerned about while designing a study, analyzing results and judging the quality of the
study. Validity is concerned with the idea that the research design fully addresses the research

19
questions and objectives the researcher is trying to answer and achieve. Reliability is about
consistency and research, and whether another researcher could use the same design and obtain
similar findings.

3.6.1 Validity
Cresweel and Milley (2000) suggest that validity is affected by the researcher’s perception of
validity in then study and the person's choice of paradigm assumption. As in all research,
consideration must be given to construct validity, internal validity external validity and reliability
(yin, 1989). Levy (1988) established construct validity using the single - case exploratory design,
and internal validity using the single - case explanatory design.

Yin (1994) suggested using multiple sources of evidence as the way to ensure construct validity. In
this study therefore, multiple sources of evidence were used as a way to ensure construct validity.
The other two possible test methods were content and criterion.

3.6.2 Reliability
Joppe (2000) defines reliability as the extent to which results are consistent over time and an
accurate representation of the total population under study is referred to as reliability and if the
results of the study can be reproduced under a similar methodology, then the research instrument is
considered to be reliable. Reliability is the consistency of your measurement, or the degree to
which an instrument measures the same way each time it is used under the same conditions with
the same subjects.

3.7 Ethical Issues

The participants will be initially contacted informally, where only the voluntary participants will be
engaged to fill the questionnaires on which the which the participants will be assured about
anonymity and confidentiality of data collected and informed them that questionnaire results are to
be recorded for transcription. I explained them the study’s aims and the procedure on how to fill
the questionnaire.

The questionnaire files will be transferred to a computer for transcription. When transcribing the
questionnaires, participants names will be replaced with code numbers assigned the codes QS001
to QS100.

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3.8 Research Budget and Work Plan
The budget is a line-item representation of the expenses associated with the proposal project. The
Budget justification contains more in-depth detail of the costs behind the line items, and sometimes
explains the use of the funds were not evident. Examples include the need for consultants, or the
unavailability within the university of an item of equipment proposed for purchase

My estimations regarding the costs including stationeries, travelling, data collection and other
research related expenses during the conduction of this research at this stage, and the study cost
will be Tshs. 1,000,000/= from own source. The budget detail is shown in the Appendix III.

This work plan of this study is estimated to take at least three months from the preparation of
research proposal, reviews by the instructor and upon his satisfactions collection of data from the
field and discussion of findings and conclusions and recommendations. The work plan may not be
fixed as depends upon the altitude and responses obtained from the field.

21
22
 REFERENCES
BBC News. (2006). Challenges Facing African's Entrepreneurs,
http://newsvote.bbc.co.uk/go./pr/fr// 1/hi/business/6100180.stm. Accessed: 2/14/2009

Hamisi, S. 2011. Challenges and opportunities of Tanzanian SMEs in adapting supply chain
management; African Journal of Business Management Vol. 5(4), pp. 1266-1276, 18 February,
2011, Retrieved from http://www.academicjournals.org/AJBM

Kessy, S, & Temu, S. (2010). The Impact of Training on Performance of Micro and Small
Enterprises Served by Microfinance Institutions in Tanzania. Research Journal of Business
Management, 10 (6). 56- 73.

Kotler, P. Wong, V., Saunders, J., and Armstrong, G. (2005). Principles of Marketing. Fourth
European Edition. Pearson Prentice Hall, UK.

Training Needs Analysis for SMEs (TNA REPORT). (2010). Supporting SMEs to Become More
Competitive in the EU Market. Republic Of Albania.
Http://Www.Eu-Sme.Al/Doc/TNA_Report_English.Pdf.

Wallace, J. (1999). "Small Enterprise Development in Africa: Lessons from Success".

Weeks, J. (2002). The efficiency of small enterprises in developing countries: an empirical

analysis. In H. Katrak, and R. Strange, editors, small scale enterprises in developing and transition
economies. Basingstoke, UK: Palgrave.

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 APPENDIXES

Appendix I: Questionnaire
Dear Respondent,
My name is Frank Martin Kajembe, a master’s student at the Institute of Finance Management.
This is an academic survey questionnaire which is aimed at identifying and collecting data
about the challenges facing small scale retailers in business operations in Kigamboni Municipal.
Your kind and objective response will significantly highlight these challenges from your
perspective and contribute to finding practical solution to this problem. This is purely academic
exercise and any information given would not be disclosed

SECTION A: GENERAL INFORMATION OF THE COMPANY

This section of the questionnaire refers to the background or biographical information. Although
we are aware of the sensitivity of the questions in this section, the information will allow us to
compare groups of respondent. Once again, we assure you that your response will remain
anonymous. Your co-operation is appreciated.

1. Name: …………………………………………………………………………….
2. Name of the Enterprise: …………………………………………………………..
3. Gender

Male

Female

4. Age

18 – 25 years

26 – 30 years

31 – 40 years

41 – 50 years

51 – 60 years

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 Above 60 years

5. Average Monthly Turnover

Less than 150,000

Less than 300,000

Less than 500,000

Less than 1,000,000

Above 1,000,000
6. How did you acquire the skill for running your
enterprise?

Through formal training

From past experience

From family

Others (specify) -

7. For how long has your business been in operations?

Less than one (1) year

Between 1 and 5 years
Between 6 and 10 years
Between 11 and 15 years
Over 15 years

8. How many people are employed by your business? ………………………………………

9. Has your business ever applied for credit from a Bank?

Yes
No

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 SECTION C
To what extent do you agree with each of the following statements. Please indicate your answer
using the following 5- point scale where:- 1 = Strongly disagree, 2 = Disagree, 3 = Neutral, 4 =
Agree and 5 = Strongly Agree
10. To what extent do you think the followings are the reasons that affects your business
financially?

1 2 3 4 5
Insufficient Capital
Lack of Access to Credit
Unforeseen Business Expenses
Government Taxes

11. To what extent do you think the following are the reasons your business have failed to
employ appropriate marketing strategies in running your business?

1 2 3 4 5
Lack of Sufficient Budget
Lack of Marketing Expertise
Failure to Identify Target Customers
Lack of Product Branding and Advertisement

12. To what extent do you think the following are the reasons your business have failed to
acquire the necessary skills and competence to run your business?

1 2 3 4 5
Lack of Funds to Acquire Necessary Skills
Poor Technology
Ignorance
Time Consuming

13. To what extent do you think the following are the reasons your busness have failed to
have a conducive environment to operate and run your business?

1 2 3 4 5
High Costs of Occupying Premises
Poor Government Planning

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High Concentration in Potential Areas
Ignorance

Thank you very much for your valuable time and information. Also for your co-
operation in completing this questionnaire.

27
 Appendix II: Interview Checklists

1. Does the government provide conducive environment for small-scale business in

Kigamboni Municipal?
2. Do the small-scale retailers in Kigamboni Municipal have access to cheap finance options
from the financial institutions?
3. Do the small-scale retailers in Kigamboni Municipal possess the skills and competence to
run their business operations?
4. Do the small-scale retailers in Kigamboni Municipal employ marketing strategies in their
business operations?

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 Appendix III: Research Budget

S/N DETAIL TOTAL

1 Proposal preparation
 Writing, Editing, Printing and Binding 50,000/=
 Consolidation of Literature 50,000/=
2 Transport Cost 200,000/=
3 Communication Cost 100,000/=
4 Designing and Developing Research Instrument 100,000/=
5 Main Field Data Collection 100,000/=
6 Data Processing, Analysis and Report Writing 100,000/=
7 Meals 100,000/=
8 Stationery Cost 100,000/=
9 Emergency 100,000/=
TOTAL 1,000,000/=

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