Small-scale rural enterprise development in Tanzania: current status and research needs
Minde, Isaac. J.
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Given the population growth rate of about 3.4% and the seasonality of agricultural production, particularly in areas where irrigation water is not available, it is unrealistic to expect agriculture to effectively employ the total rural population. Due to national budget constraints, the educational system cannot absorb a significant proportion of the primary school leavers into higher education. Given their youth and lack of capital and skill, they cannot immediately be absorbed in agriculture, even if cultivatable land is available. Thus, the introduction and development of small-scale enterprises alongside farming is a promising strategy for increasing employment and incomes of the rural population. A nationally-accepted definition of small-scale enterprise (SSE) does not exist. However, this study describes a SSE as an activity performed by a person or a group of people in a rural or urban area characterized by a low degree of organizational skill and a relatively low level of capital—compared to labour—in producing the final product. Part of this description is shared by the Small-Scale Industries Organization (SIDO). The National Bank of Commerce (NBC) uses a financial definition to classify small and large enterprise. According to the bank, a SSE is one which uses US$300,000 or less for its establishment.