Vocational Graduates’ Challenges in Setting up and Operating SMEs in the Tanzanian Environment

Abstract

This study investigated the challenges faced by Vocational Education and Training (VET) graduates in establishing and operating Small and Medium-sized Enterprises (SMEs) in Tanzania. The study used a qualitative approach with a cross-sectional design to capture data at a single point in time, allowing for an in-depth analysis of participants' perceptions and experiences. The study targeted a population of 220 SME owners. Using the Yamane formula, 222 participants were sampled, including 130 SME owners and 15 Entrepreneurship Education Coordinators selected purposefully for Key Informant Interviews and FGDs. Data was analyzed using content analysis, identifying themes aligned with the study's research questions. The study concludes that VET graduates are faced with significant challenges that impact their business sustainability. These challenges include inadequate government policy support for enhancing SMEs performance, limited access to financing, insufficient managerial skills, gaps in access to information and knowledge, complex regulatory requirements and limited innovation skills. Key recommendations include that the Government of Tanzania should simplify regulatory procedures and strengthen policies to provide targeted support for SMEs.