Publication - Working Paper
Access to affordable long-term finance is one of the biggest barriers to development of small and medium enterprises. Growth oriented small and medium enterprises face a momentous challenge of raising capital. Debt finance is not only expensive and difficult to get, but also inconvenient given the relatively short maturities of loans. Equity finance offers an opportunity for SMEs to raise capital, share risks, complement knowledge and skills, etc. Yet, it is grossly underdeveloped. The private equity industry has not sufficient adapted to the local institutional environment in developing economies like Tanzania. There are many policy initiatives to promote access to finance for SMEs, including equity in developing countries including Tanzania. There are also many individuals, enterprises and institutions, both local and foreign who are engaged in various forms of equity finance. Some institutions, such as the Dar es Salaam Stock Exchange are actively promoting equity finance. All these need locally relevant knowledge of equity finance.
The objective of the study was to generate lessons on the experience, successes and challenges of equity investments in Tanzania.
The specific research questions were: