FACTORS CONTRIBUTING TO CREDIT BEHAVIOURS AMONG

WOMEN ENTERPRENEURS IN TANZANIA

THE CASE OF DAR-ES-SALAAM

YEAR III, SEMESTER II

SEMESTER PROJECT

MSANGI WALDA H

BACHELOR OF SCIENCE IN ACCOUNTING AND FINANCE

ARDHI UNIVERSITY

JUNE 2023
 FACTORS CONTRIBUTING TO CREDIT BEHSVIOURS AMONG
WOMEN ENTERPRENEUURS IN TANZANIA

THE CASE OF DAR-ES-SALAAM

YEAR III, SEMESTER II

SEMESTER PROJECT

MSANGI WALDA H

A Semester Project Submitted in Partial Fulfilment of the Requirements for the Award of the
Bachelor Degree of Science in Accounting and Finance (BSc.AF) of Ardhi University

DEPARTMENT OF BUSINESS STUDIES

SCHOOL OF EARTH SCIENCES, REAL ESTATE,

BUSINESS AND INFORMATICS

ARDHI UNIVERSITY

DAR ES SALAAM

JUNE 2023
DEDICATION
I would like to dedicate this work to my lovely father Hamad Msangi, my lovely mother
Fatuma Samwel, my brother Mulge Msangi for their support and encouragement.
DECLARATION
I Msangi Walda H, declare that the content of this semester project are the results of any own
study and findings and, the best of my knowledge, they have not been presented anywhere and
will not be presented anywhere for a Diploma, Degree or any professional award in any
Institution of Higher Learning.

___________________________
MSANGI WALDA
Department of Business Studies
School of Earth Sciences, Real Estate, Business Studies and Informatics
Ardhi University
Dar es Salaam

SUPERVISOR’S DECLARATION
This report has been presented as a Semester Project in partial fulfilment of the requirements
for the award of the Bachelor Degree of Science in Accounting and Finance of Ardhi
University.

……………………………............ ………………………………….
CPA LISA BALTAZAR DR. SAMWEL SANGA ALANANGA
PROJECT SUPERVISOR HEAD, DEPARTMENT OF BUSINESS
STUDIES SCHOOL OF EARTH
SCIENCES REAL ESTATE BUSINESS
AND INFORMATICS.
ARDHI UNIVERSITY
DAR ES SALAAM
ACKNOWLEDGEMENT
Firstly I would like to thank Allah, for his help, support and giving me strength and support to
complete my research work. Also I would like to express my sincere gratitude to my supervisor
Miss Lisa Baltazar for guiding me and giving me support during the entire time of conducting
research, may Allah the most magnificent bless you abundantly.

Moreover, I would like to express special gratitude to all respondents who helped me in
answering the questionnaire and obtain the findings because without them I would have not
completed the work.

I also thanks my fellow classmates BAF 2022-2023 for their support because with them it has
be a wonderful journey. Special thanks to my best friend Honest, Betrida and Elsheba and my
close friend Elizabeth for their support throughout my research work.
ABSTRACT
Credit default has become a common problem in Tanzania contributing about 7.63% of
commercial loans which increases expenses. Despite many reasons was explained before that
causes credit default but the problem still continue. This research aim at looking three factors
which contribute to credit behaviour which are inferiority complex, diversion of fund and
family influence. The research aimed at assessing the impact of inferiority complex and family
influence on credit behaviour and relationship of diversion with credit behaviour.

The research adopted descriptive research design and quantitate approach and the data was
collected through closed ended questionnaires. The data was analysed through SPSS version
20 and descriptive analysis, and the findings was presented in form of table and graphs. The
findings show that most of respondents have agreed that family influence and inferiority
complex have impact on their credit behaviour and caused credit default.

The study concluded that inferiority complex have impact on credit behaviour as well as family
influence have impact on credit behaviour.
TABLE OF CONTENTS

DEDICATION ............................................................................................................................................. i
DECLARATION ......................................................................................................................................... ii
ACKNOWLEDGEMENT ............................................................................................................................ iii
ABSTRACT............................................................................................................................................... iv
TABLE OF CONTENTS............................................................................................................................... 1
CHAPTER ONE ......................................................................................................................................... 3
BACKGROUND OF THE STUDY................................................................................................................. 5
1.2 STATEMENT OF THE PROBLEM ................................................................................................. 6
1.3 RESEARCH OBJECTIVES.............................................................................................................. 7
1.3.1 Main objective ....................................................................................................................... 7
1.3.2 Specific objectives .................................................................................................................. 7
1.4 RESEARCH QUESTIONS.............................................................................................................. 7
1.5 RESEARCH HYPOTHESIS ............................................................................................................ 7
1.6 SCOPE OF THE STUDY ................................................................................................................ 8
1.7 LIMITATIONS OF THE STUDY ..................................................................................................... 8
1.8 SIGNIFICANCE OF THE STUDY ................................................................................................... 9
CHAPTER TWO ...................................................................................................................................... 10
CONCEPTUAL FRAMEWORK AND LITERATURE REVIEW ....................................................................... 10
2.0 Introduction ............................................................................................................................ 10
2.1 Definitions of Terms ................................................................................................................ 10
2.2 Theoretical Review .................................................................................................................. 11
2.3. Empirical review ..................................................................................................................... 12
2.4 Research Gap .......................................................................................................................... 13
2.5 Conceptual Framework ........................................................................................................... 13
CHAPTER THREE .................................................................................................................................... 14
RESEARCH METHODOLOGY .................................................................................................................. 14
3.0 Introduction ............................................................................................................................ 14
3.1 Research approach and design ............................................................................................... 14
3.1.1. Research Approach ............................................................................................................. 14
3.1.2 Research Design ................................................................................................................... 14
3.1.3 Area of the study.................................................................................................................. 14
3.2 Population and Sampling ........................................................................................................ 15
 3.2.1 Targeted Population ............................................................................................................ 15
3.2.2 Unit of Analysis .................................................................................................................... 15
3.2.3 Sampling Techniques ........................................................................................................... 15
3.3.4 Sample Size .......................................................................................................................... 15
3.3 Data collection ........................................................................................................................ 15
3.4 Data analysis and presentation............................................................................................... 16
3.5 Ethical consideration............................................................................................................... 16
3.6 Chapter summary.................................................................................................................... 16
CHAPTER FOUR ..................................................................................................................................... 17
DATA ANALYSIS AND FINDINGS ............................................................................................................ 17
4.0 Introduction ............................................................................................................................ 17
4.1 Demographic factors ............................................................................................................... 17
4.1.1 Age ....................................................................................................................................... 17
4.1.2 Marital status ....................................................................................................................... 18
4.1.3 Education level ..................................................................................................................... 19
4.1.4 Financial service institutions ................................................................................................ 19
4.1.5 Loan interest ........................................................................................................................ 20
4.2 Descriptive statistics ............................................................................................................... 20
4.3 Factor analysis ......................................................................................................................... 22
4.4 Regression Analysis ................................................................................................................. 23
4.5 Objectives................................................................................................................................ 24
4.5.1 Inferiority complex ............................................................................................................... 24
4.5.2 Diversion of fund .................................................................................................................. 25
CHAPTER FIVE ....................................................................................................................................... 28
CONCLUSION AND RECOMMENDATIONS............................................................................................. 28
5.0 Introduction ............................................................................................................................ 28
5.1 Summary of the findings ......................................................................................................... 28
5.1 Conclusion ............................................................................................................................... 29
5.2 Recommendations .................................................................................................................. 29
REFERENCES .......................................................................................................................................... 30
APPENDIX .............................................................................................................................................. 32
QUESTIONAIRE ...................................................................................................................................... 32
 LIST OF TABLES
4.1.1 Table: Age 1 ................................................................................................................................. 18
CHAPTER ONE
BACKGROUND OF THE STUDY
A larger proportion of the world’s population is comprised of women (Scholar journal of
applied science research, 2019). (The gender ratio, 2021) Estimates that there will be 101.68
men for every 100 women in the world. The presence of women entrepreneurship is crucial for
the growth of the economy as it not only leads to the creation of job opportunities but also
contributing to the overall development of the society (Noor & Md isa, contributing factors of
women enterpreneurs business growth and failure in Pakistan, 2021).

According to (statististics on women enterpreneurs, 2023) 252 million women worldwide are
business owners and another 153 million run well established enterprises. Statistics on women
entrepreneurs demonstrates that their numbers have increased by 114% during the past 20 years
and 849 new businesses are opened everyday by women’s.

Microfinance Institutions often target women as their primarily clients and its estimated that
80% of the global microfinance’s clients are women (state of the microcredit summit Report,
2018). Evidence from different researcher’s shows that most credit are distributed to women.
For example, in Bangladesh 95% of its credit are distributed to women (Shah, 2014). Also,
evidence shows that even if women are the ones who are given most priority in loan but they
are the ones who have greater chance of defaulting these loans due to various factors unless
they have a company and receive loan at the foundation stage (De Andres, Gimeno, & de Cabo,
2021).

Globally, Africa has the highest numbers of female entrepreneurs with around 26%of adult
women actively engaged in entrepreneurship and contribute about 13% of world GDP
(Conference Havard University, 2020). Existing loan default is 6% each year ( Arhin I, 2019)
Several studies have identified limited access to finance as a primary reason for credit default
among women entrepreneurs for example, (Oluwakayode, 2020) argue that women
entrepreneurs face more obstacles when seeking financial support than men. They often have
fewer assets to use as collateral, lower incomes, and less experience compared to their male
counterparts, making it difficult for them to secure loans from formal financial institutions.
Instead, women entrepreneurs often rely on personal savings, family, and friends for funding,
which can create a higher likelihood of credit default.

In East Africa also, there are numerous factors of credit default, according to (Twesige, et al.,
2021) the result indicate that credit default is significantly affected by delay in loan,
disbursement, inadequate loan amount, high interest rates, inadequate management and
unfavourable business environment. And the loan defaults can be caused mainly by three broad
characteristics which are borrower characteristics, business characteristics and loan
characteristics (Mohammad, Kumar, & Sorooshian, 2019)

The percentage of nonperforming loan In Tanzania is 7.63%, (Global economy, 2021)

according to (Janeth, 2021) percentage of individual women entrepreneurs defaulting is 50%
compared to group programs which is less than 10%. According to the survey of 2013 different
factors including, high interest rate, lack of collateral, negative experiences and beliefs, cultural
practices, corruption, can contribute to credit default. Also, institutional factors, borrowers’
factors and loan characteristics causes defaulting (Grace, 2020). Also, other studies have shown
that lack of finance literacy can lead to loan default (Roza, 2021). Also lack of self-control can
result to loan default among other entrepreneurs (Gomera & Ngollo, 2023) and some other
microfinance has inefficient loan repayment procedures which resulted too many defaulters
(Lydia, 2019).

There are some other institutional factors that contribute to loan default which are credit
policies, procedures of recovering the loan, and loan appraisal (Maina, 2014). Some women
take loans with the aim of supporting their husband without knowledge of managing it leading
to default (Tijjani, Pulka, & Muazu, 2020). Also, some women entrepreneurs that have multiple
borrowing either from the same microfinance or different microfinance are more likely to
default (Sakyi, Yusif, Aidoo, & Baidoo, 2019).

This being the case, Numerous factors have indicated the factors contributing to credit default
but there is a need to conduct more research on factors because of changes of time Overall,
credit default is a significant challenge faced by women entrepreneurs, and understanding the
factors that contribute to it is essential to develop effective policies and interventions to support
women entrepreneurs and promote gender equality in entrepreneurship. Women entrepreneurs
require support in the form of capacity-building programs, access to education and training,
mentorship, and access to finance at favourable terms to overcome the challenges they face.

1.2 STATEMENT OF THE PROBLEM

It appears that loan default among women entrepreneurs in Tanzania is a common issue that is
influenced by a variety of factors, including limited access to finance, inadequate financial
management skills, and unfavourable loan terms. According to (Global economy, 2021) the
percentage of non-performing loan of Tanzania commercial bank is 7.63 % of all bank loans
and according to (Janeth, 2021) percentage of individual women entrepreneurs defaulting is
50%.

However, it is also clear that there are some others new factors, such as diversion of funds,
inferiority complex and family influence that could also contribute to loan default among
women entrepreneurs in the country in which most researchers they have not discussed and are
the ones mostly contributing to credit default. Therefore, it is important to understand the extent
to which diversion of funds, inferiority complex and family influence contribute to credit
behaviours among women entrepreneurs in Tanzania, and to develop strategies to mitigate the
risk associated with these factors.

1.3 RESEARCH OBJECTIVES

1.3.1 Main objective
The main objective of this study is to access factors contributing to credit behaviour among
women entrepreneurs in Tanzania.

1.3.2 Specific objectives

1. To assess the relationship between diversion of fund and credit behaviour among
women entrepreneurs in Tanzania.
2. To investigate the impact of family influence on credit behaviour among women
entrepreneurs in Tanzania.
3. To assess the impact of inferiority complex on credit behaviour among women
entrepreneurs in Tanzania.

1.4 RESEARCH QUESTIONS

1. How does diversification of fund contribute to credit behaviour among women
entrepreneurs in Tanzania?
2. What is the impact of family influence on credit behaviour among women entrepreneurs
in Tanzania?
3. What is the impact of inferiority complex and credit behaviour among women
entrepreneurs in Tanzania?

1.5 RESEARCH HYPOTHESIS

Null hypothesis: Diversion of fund does not contribute to credit behaviour among women
entrepreneurs in Tanzania.
Alternative hypothesis: Diversion of fund contribute to credit behaviour among women
entrepreneurs in Tanzania.

Null hypothesis: Family influence have no significant impact on the credit behaviour among
women entrepreneurs in Tanzania.

Alternative hypothesis: Family influence have a significant impact on the credit behaviour
among women entrepreneurs in Tanzania.

Null hypothesis: There is no significant impact on inferiority complex and credit behaviour
among women entrepreneurs in Tanzania.

Alternative hypothesis: Inferiority complex have a significant impact on credit behaviour

among women entrepreneurs in Tanzania.

1.6 SCOPE OF THE STUDY

This study based on Tanzanian women business owners who have loans from different banks
and microfinances. The study concentrated on the factors causing credit default and contribute
to credit behaviours among women entrepreneurs. The study mainly focused on three factors
which are diversion of fund, inferiority complex and family influence .This study also examine
the impact of socio-economic factors, credit assessment and management practices, and
business-related factors on credit behaviour among women entrepreneurs in Tanzania. The
study's findings was limited to women entrepreneurs in Tanzania and may not be generalized
to other countries or regions with different contexts and conditions.

1.7 LIMITATIONS OF THE STUDY

This research study has encountered the following limitations:

Time limitations, three-month period is not enough to conduct research effectively and follow
all the procedures correctly including data collections, interpretations and recommendation
and at the same time studying seven subjects effectively.

Financial constraints, the cost of moving from one place to another to collect data is a problem
because of a limited budget, limited access to funding and unexpected expenses which arise
during the period of research.
1.8 SIGNIFICANCE OF THE STUDY
Increase of academic knowledge; by conducting this study it helps in increasing knowledge in
the field of entrepreneurship and finance, and enabling others to understand the factors
contributing to credit default as well as adding something new.

Gender equality; the study will contribute to promoting gender equality and women's economic
empowerment by providing insights into the challenges faced by women entrepreneurs in
accessing and managing credit, and the factors that contribute to credit default. The study's
findings can be used to inform policies and interventions that promote gender-responsive credit
assessment and management practice.
CHAPTER TWO
CONCEPTUAL FRAMEWORK AND LITERATURE REVIEW
2.0 Introduction
The second chapter of this research focuses on several concepts together with reviewing
different literatures, it contains definition of terms, theoretical review, and empirical reviews
research gap and conceptual framework. The purpose of conducting literature review is to
provide a critical overview and research work relevant to the topic.

2.1 Definitions of Terms

Women entrepreneurs

Women entrepreneurs are individuals who are identified as female and actively engage in
creating, organizing, and managing their own businesses or ventures. They demonstrate
entrepreneurial characteristics and undertake the risks associated with starting and running a
business. Women entrepreneurs are driven by a desire to pursue their own professional goals,
achieve financial independence, and make a positive impact in their chosen industries or
communities. They may establish businesses across various sectors, ranging from technology
and innovation to social enterprises and traditional industries. Women entrepreneurs contribute
to economic growth, job creation, and societal development, while also challenging gender
norms and promoting gender equality in the entrepreneurial ecosystem (Kathe, 2017).

Credit default

A credit default is the financial failure of a person or a company to repay the loan on the due
date (Wilson, 2007). According to the author when a corporation or individual cannot fulfil
their debt payment on time, they always seek alternatives like debt restructuring or obtaining
temporary financing. If the underlying cash flow issue remain unresolved beyond a specific
time frame such as 90 days calendar days, it is presumed that the entity may be insolvent and
at this point the loan is officially declared in default and the creditor will then commence legal
actions to recover any secured assets (Wilson, 2007).

Spouse influence

Spouse influence refers to the impact or effect that a person's spouse or partner has on their
thoughts, decisions, behaviours, and overall lifestyle. It recognizes the significant role that a
spouse can play in shaping an individual's choices, preferences, and actions, often through
direct communication, shared values, and the dynamics of their relationship. Spouse influence
can extend to various aspects of life, such as financial decisions, career choices, personal habits,
and social activities. It acknowledges the mutual influence and interdependence that exists
within a marital or committed partnership. (Frese & Wolf, 2018).

Inferiority complex

Inferiority complex refers to the fundamental sense of inadequacy and insecurity stemming
from real or perceived physical or psychological shortcomings. It represents a deep-seated
belief of being lesser in comparison (American Psychological Association, 2019). Also, the
author explained that inferiority complex is developed from various experiences and also it can
result to failure. Also, inferiority complex is a natural psychological state experienced by all
individual beginning in infancy and persisting throughout the life (Alfred, 2022). Also, the
author explained that inferiority complex serves as a fundamental motivator that influences
behaviours, thoughts, feelings and actions. Also some researcher explained that women feel
inferior and this lead to them having doubt of their entrepreneurial abilities and have impact
because it lead to credit default behaviour (Bhat & Tariq, 2020)

2.2 Theoretical Review

Credit Default theory

Credit risk analysis models are employed by financial institutions to assess the likelihood of a
borrower defaulting. These models furnish insights into the borrower's credit risk level at
various points in time. Failing to identify credit risk in advance can subject lenders to the
potential of default and the loss of funds. Lenders heavily depend on the validation offered by
credit risk analysis models to make critical lending determinations, including whether to grant
credit to the borrower and at what interest rate (Wilson, 2007)

Individual lending theory

Individual lending refers to the practice of extending credit to a single client, eliminating the
need for other group members to act as guarantors. Instead, loan eligibility is determined
through an evaluation of the client's character and an analysis of their cash flow. The study
model explains the lender's responsibility in granting loans and the borrower's obligation to
fully repay the loans. In this lending model, the borrower directly receives the loan and is
responsible for repaying the borrowed amount plus interest, without relying on financial
support from a group if they default. The borrower usually receives assistance such as technical
guidance, payment schedules, and training in managing their business (Orazio, Britta, Ralph,
Emla, & Heike, 2014).

2.3. Empirical review

Worldwide different authors have shown the causes and factors that lead to credit default
among entrepreneurs. One among the biggest factor which contribute to credit default among
women entrepreneurs in the world is financial literacy, women entrepreneurs often lack
financial management skills and experience, which can lead to poor financial decisions, such
as over borrowing or taking on loans with unfavourable terms which can lead to increase of
default rate (Kinza & Rafay, 2021). One among the author concluded that the factors which
lead and contribute to credit defaults among women entrepreneurs are failure of the business,
late disbursement of the funds, inadequate loan size, unforeseen contingencies and high interest
rate (Oluwasanya, Ogunmuyiwa, Aladegorove, & Akerele, 2020). The author provided a good
starting point of understanding loan default but there are some other factors in which the author
did not consider which also may be the cause of credit default among women entrepreneurs.

Also, different policies which are set by the government and procedures of different financial
institution are the reason why most of businesses owned by women entrepreneurs fails and lead
to different problem including defaulting in loan (Noor & Md isa, Contributing factors of
women enterpreneurs business growth and failure in Pakistan, 2021). Also, loan delay, loan
shortage, loan deviation, interest rate, improper management, business environment
contributes largely to credit default and non-performance of loan. Also, another author
concluded that there are different reasons in which women entrepreneurs had to take different
loans to start up their business but the main reason was so as to gain financial freedom from
their spouse and support family (Swid, Rukobo, & Maro, 2023). Also, borrowers’
characteristics and business characteristics was concluded as factors which lead to credit
default among women entrepreneurs (Phyllis, 2016).

In Tanzania different study concluded that insufficient monitoring by microfinance institutions

staffs regarding on how borrowers utilize and repay loan was the main cause of credit default.
Additionally, default in loan repayments was associated with borrowers having insufficient
collateral in which they can use to secure their loan having insufficient collateral in which they
can use to secure their loan (Edward, 2014). Also, other concluded that lack of entrepreneurial
skills and experiences contributed to credit default among women entrepreneurs in Tanzania
due to the fact that they do not have proper and required skills as well they do not have the
required training in which they can use it to manage their business (Eliud, 2015).

2.4 Research Gap

The research gap in the context of credit default among women entrepreneurs in Tanzania lies
in the need to investigate the three key factors: diversification of funds, inferiority complex,
and spouse influence. Limited research has been conducted on how diversifying funding
sources, such as accessing multiple financial institutions or alternative financing options, can
impact credit default rates among women entrepreneurs. Additionally, there is a lack of
understanding regarding the influence of feelings of inadequacy, self-doubt, or low self-esteem
(inferiority complex) on business decision-making and loan repayment behaviour.
Furthermore, the role of spouses in managing business finances and their influence on loan
repayment behaviours has not been studied because most of the researches focus on general
factors and other factors.

2.5 Conceptual Framework

This is the framework that shows relationship between dependent variables and independent
variables so as to understand factors contributing to credit default among women entrepreneurs.

Diversion of funds

Inferiority
complex Credit default

Family influence

Independent variables Dependent variable

CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction
This chapter outlines the methodology that has been used in the research study. It includes
research design, research approach, field of the study, target population, sample size and
techniques, data collection tools, and data analysis.

3.1 Research approach and design

3.1.1. Research Approach
The research approach that was used in this study was quantitative approach so as to obtain
information on the factors contributing to credit behaviour among women entrepreneurs.
Quantitative approach was chosen because the numerical data could have been analysed
statistically and data that was collected were measurable and this allows the researcher to draw
conclusion that have a broader applicability and maker general statement about the factors
contributing to credit behaviour.

3.1.2 Research Design

This research bases on factors contributing to credit behaviour among women entrepreneurs in
Tanzania, so the research design that was used in this study is descriptive design because in
this design the researcher can describe the characteristics and behaviour of a particular group
which are women entrepreneurs. Also it allows the researcher to gain insight of various
characteristics.

3.1.3 Area of the study

The study was conducted in Dar es Salaam because it is the region which consist of many
women entrepreneurs who conducts different types of business. In Dar es salaam there are
varieties of different lenders such as microfinance institutions which finance small business
such as FINCA, ASA , also other financial institution such as commercial banks who lend
money to women entrepreneurs so as to conducts their daily operations of their business.
3.2 Population and Sampling

3.2.1 Targeted Population

The target population of this study was women who are engaged in different entrepreneurial
activities who have loan in different financial institutions in Dar es Salaam. This included
women who own and operate different businesses of various sizes and sector in the region but
only those who have loans.

3.2.2 Unit of Analysis

In this study the unit of analysis was individual women entrepreneurs who have loans at
different financial institution including banks, microfinance institutions, cooperative society,
government agencies and different non-government organizations. The reasons of choosing
this unit was because data would have been collected from each participant regarding their
characteristics, business activities, financial decisions and experiences concerning credit and
credit behaviours and thus help to explore personal factors that may influence credit
behaviours.

3.2.3 Sampling Techniques

In this study, convenience sampling technique was used by the researcher because it allows the
researcher to reach participants who rare available and accessible. Also it save time and cost
and attracts more participants.

3.3.4 Sample Size

From the formula introduced by (Kothari, 2004) , the sample was calculated by the researcher
as follows

𝑁
n = (1+𝑁(𝑋 2 ))

Where: n = sample size

N = population

X = error tolerance

3.3 Data collection

To be able to answer questions data was collected through primary method of data collection
in primary data method, data was collected through questionnaires. Questionnaire was designed
to collect quantitative data related to factors contributing to credit behaviour among women
entrepreneurs. The questionnaire included questions that assess different behaviours, business
information, inferiority experiences, diversion of credit, and credit behaviour.

3.4 Data analysis and presentation

Statistical Package for the Social Science (SPSS) version 20 was used as a tool for data
analysis. The data collected (quantitative data) were analyzed through descriptive statistics.
Descriptive statistics include frequencies, percentage, mean and standard deviation. Not only
that but also correlation analysis and regression analysis was used to show the relationship and
relation between dependent variable which is credit behavior and Independent variables which
are family influence, inferiority complex and diversion of fund.

The data analyzed to show the result was presented in form of tables, pie chart, and bar graph
in order to simplify the conclusion of the results and findings.

3.5 Ethical consideration

In this study ethical guidelines was followed to ensure that people who participate and their
information were protected. Participants was informed about the purpose of the study, and their
personal information was kept private and not shared to anyone else. Participation was
voluntary, meaning that they had chosen whether or not to take part in answering the research
questions. The questions that was asked was appropriate and won’t make them feel
uncomfortable. The goal was to make sure that the study is fair, respectful, and beneficial for
everyone involved.

3.6 Chapter summary

This chapter mainly deals with research methodology that was used on factors contributing to
credit behaviour among women entrepreneurs in Tanzania. It consist research approach,
design, sampling and sample size, data collection methods, data analysis and presentation as
well as ethical consideration.
CHAPTER FOUR
DATA ANALYSIS AND FINDINGS
4.0 Introduction
Credit behaviour is caused by different factors based on both lender and borrowers
perspectives. This chapter consists of analysis and findings of factors contributing to credit
behaviour among women entrepreneurs in Tanzania which aims in determining the relationship
between variables and determine how each factor contribute to credit behaviour so as to answer
research questions and objectives. The target was 80 respondents but I managed to collect data
from 40 respondents.

4.1 Demographic factors

So as to understand different factors contributing to credit default among women entrepreneurs
in Tanzania. The researcher had to understand first the control variables, these include age,
marital status, level of education, level of income and level of the credit that they receive from
different institutions. Descriptive analysis which consist of frequency and percentage was used
to present the result. The purpose of control variable is that the researcher aimed at finding a
certain characteristic that influence or contribute to the credit behaviour.

4.1.1 Age
The figure below represents the age of respondents who answered the questionnaire, the
findings show that most respondents age range from the age of 18-24 with a percentage of 42.5
followed by those who range between 25-34 which consist of 27.5 percent, then followed by
those between the age of 35-44 and later 45 and above. Through these findings the researcher
can conclude that most respondents are young people who range from the age of 18 up to 34
which sometimes contributes to credit behaviours among women entrepreneurs.
 4.1.1 Table: Age 1

Frequen Percen Valid Cumulative

cy t Percent Percent
18-24 17 42.5 42.5 42.5
25-34 11 27.5 27.5 70.0
Val 35-44 8 20.0 20.0 90.0
id 45 and
4 10.0 10.0 100.0
above
Total 40 100.0 100.0

4.1.2 Marital status

The figure below of marital status present the findings which show that 45% of respondents
are married followed by 42% of women entrepreneurs who are single, then 7.5% of women
entrepreneurs are divorced and 5% are widowed. Through these findings the researcher can
explain the findings as respondents who are married take their responsibilities seriously and
they can repay their credit frequently so as to achieve a certain goal compared to the one who
are single can delay paying their credit on time due to different circumstances.

4.1.2.1Table: Marital status

Frequen Percen Valid Cumulative

cy t Percent Percent
Single 17 42.5 42.5 42.5
Marrie
18 45.0 45.0 87.5
d
Val
Divorc
id 3 7.5 7.5 95.0
ed
Widow
2 5.0 5.0 100.0
ed
 Total 40 100.0 100.0

4.1.3 Education level

The figure below represent the findings concerning education level of respondents which show
that 57.5% of respondents have university education, followed by those who have secondary
education with 20%, then followed by those who have vocational training education with12.5%
and lastly 10 % of those who have primary education. Through this findings it shows that
respondents who have university education or higher are the ones who contribute mostly to
credit behaviours followed by those who have secondary education.

4.1.3.1 Table: Education

Frequen Percen Valid Cumulative

cy t Percent Percent
Primary education 4 10.0 10.0 10.0
Secondary education 8 20.0 20.0 30.0
Val Vocational training 5 12.5 12.5 42.5
id University degree or
23 57.5 57.5 100.0
higher
Total 40 100.0 100.0

4.1.4 Financial service institutions

The figure below represent the institutions in which respondents take loan from. It show that
mostly respondents takes loan from different commercial banks in the country, followed by
cooperative societies and then microfinance institutions. Based on the findings respondents
take loan from financial institutions who have low interest
 4.1.4.1 Table: Source of borrowing

Frequen Percen Valid Cumulative

cy t Percent Percent
Commercial bank 11 27.5 27.5 27.5
Microfinance
9 22.5 22.5 50.0
institution
Cooperative society 10 25.0 25.0 75.0
Val
Government agency 4 10.0 10.0 85.0
id
Non-Government
Organizations 6 15.0 15.0 100.0
(NGOs)
Total 40 100.0 100.0

4.1.5 Loan interest

The figure below represent respondents and their perceptions in interest rate from the financial
institutions in which they take loan from. 65% have the perceptions that the interest rate
charged is high and 35% they perceive interest rate as low. The researcher conclude that from
these findings if the interest rate charged is high these can contribute to credit default among
respondents.

4.2 Descriptive statistics

Descriptive analysis was used to find the mean and standard deviation of Likert scale questions
whereby there were 10 questions concerning credit behaviour and family influence as shown
in the table below:
4.2.1 Table: Descriptive Statistics

N Mean Std.
Deviation
Do you usually pay your credit on time? 40 3.33 1.071
How many time do you utilize the maximum available credit 40 2.45 1.154
on your credit account?
Have you ever failed to meet your credit obligation? 40 2.68 1.309
Do you frequently make a minimum payment of your loan? 40 2.80 .966
Have you ever borrow more than your limit? 40 2.58 1.217
Did any member from your family provided you financial 40 2.10 .928
support to start your business?
How many times do you involve your family before making 40 2.32 .997
decision concerning your credit?
Is there any family member over stood as guarantor of your 40 2.38 1.115
business in credit application?
How many times your family influence you on how you can 40 2.50 1.414
manage your loan?
Does your family ideology impact your credit score? 40 2.35 1.292

Source: Field data 2023

From question 1 to 5 which was concerned with credit behaviour, most respondent have agreed
that they normally pay their credit on time, this is because the mean obtained is 3.33. Also the
most respondent agree that they usually make a minimum payment of their loan, as the mean
obtained is 2.8. The most respondent disagree that they do not utilize the maximum available
credit on their credit account, also they disagree that they have never r borrow more than their
limit and failed to repay their credit obligation. This is because their mean decrease from
average mean which is 2.77.
From six to ten which was dealt with family influence most respondent agreed there are some
family members that act as guarantor of their business in credit application, also they agree that
their family influence them on how they can manage their loan and family ideology impact
their credit score. This is because their mean is greater than 2.33. Also most respondent they
disagree that they don’t consult their family when making credit decision as well as none of
their family provide financial support when they started their business. The mean of these two
question decrease from average mean of 2.33.

4.3 Factor analysis

In factor analysis the researcher reduces the certain amount of factors into variables that can
relate to each other. In the table below it shows four variables with different questions along
with their communalities. From the table, 1.000 means principle component which explain
more of the variance. Inferiority complex have low communalities because it is less than 0.5
and this it can be due to different reasons including respondents they did not understand well
the questions or they had the same answer. So in this case researcher removed it from analysis.
But other factors including family influence, credit behaviour, and inferiority complex have
communalities above 0.5 as shown in the table they relate to each other and used for analysis.

4.3.1 Table: Communalities

InitialExtracti
on
Inferiority complex 1.000 .487
Inferiority complex 1.000 .602
Diversion of fund 1.000 .649
Diversion of fund 1.000 .840
Credit behaviour 1.000 .672
Credit behaviour 1.000 .694
Credit behaviour 1.000 .652
Credit behaviour 1.000 .745
Credit behaviour 1.000 .703
Family influence 1.000 .660
Family influence 1.000 .763
Family influence 1.000 .715
Family influence 1.000 .737
Family influence 1.000 .734
Extraction Method: Principal Component
Analysis.
4.4 Regression Analysis
From regression analysis the researcher wanted to find the relationship between variables
which are diversions of fund, family influence, inferiority complex and credit behaviours, and
test hypothesis. From the study the following were the hypothesis of the study;
H1: Diversion of fund contribute to credit behaviour among women entrepreneurs in Tanzania.
H2: Family influence have a significant impact on the credit behaviour among women
entrepreneurs in Tanzania

H3: Inferiority complex have a significant impact on credit behaviour among women
entrepreneurs in Tanzania

From the regression conducted by the researcher R is 0.518 approximately to 52% this show
that inferiority complex, diversion of fund and family influence have strong relationship with
credit behaviour.

Model Summary
Mode R R Square Adjusted R Std. Error of
l Square the Estimate
1 .518a .258 .189 .58590
a. Predictors: (Constant), diversion of fund, family
influence, inferiority complex

Table 4.4.1: ANOVA Table 4.4.1: ANOVA

Model Sum of df Mean F Sig.

Squares Square
Regression 3.827 3 1.276 3.717 .000b
1 Residual 10.985 32 .343
Total 14.812 35
a. Dependent Variable: credit behaviour
b. Predictors: (Constant), diversion of fund, family influence, inferiority
complex
4.5 Objectives
4.5.1 The first objective was to assess the impact of Inferiority complex on credit
behaviour
The aim of this objective was to assess the impact of inferiority complex on credit behaviours.
From the findings below it shows that 70% of respondents have fears in their entrepreneurial
abilities when they start a business or when they tend to try something else. Also from the bar
graph below represents respondent and the level of confidence in which the majority of
respondent they do not have self confidence in conducting entrepreneurial activities especially
between the age of 25 up to 34 followed by those of 45 and above. Lack of confidence have no
impact on credit behaviours and cause to credit default because women can fear that they are
not capable of doing certain activities but they can repay their loan

Figure 4.5.1.1 inferiority complex figure

4.5.2 The second objective was to assess the relationship between Diversion of fund and
credit behavior

From the findings below most respondents use their funds for other purposes than that in which
they took the loan for. Different entrepreneurs take loan and use it to solve family problems,
emergency situations or personal issues as shown below

4.5.2.1 Table: Other purpose Frequencies

Responses Percent of

N Percent Cases

Personal 10 25.0% 25.0%

Family 11 27.5% 27.5%

Emergency 19 47.5% 47.5%

Total 40 100.0% 100.0%

From the findings the researcher concluded that most respondents diversify funds and use it to
solve different families problems as shown in the chart below and other take it to solve different
personal problems as shown in chart below.
Figure 4.5.2.2 Diversion of fund

By diversify the fund respondents were not able to repay the loan, and this lead to credit default
or sometimes lead to loan delinquency which contribute to credit behaviour.
Also the researcher established the correlation between two variables which are diversion of
fund and credit behaviour as shown in the table below, and the result was diversion of fund and
credit behaviour have a positive correlation which is 92%
Table 4.5.2.3 Correlations

Diversion of fund Credit behaviour

Diversion of fund Pearson Correlation 1 .092

Sig.(2 tailed) .584
N 40 40

Credit behaviour Pearson correlation .092 1

Sig.(2 tailed) .584
N 40 40
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5.0 Introduction
This chapter presents the conclusion on findings on study of factors contributing to credit
default among women entrepreneurs in Tanzania. Also it contain conclusion and
recommendations on the factors which can be improved.

5.1 Summary of the findings

This study aimed at to assess the factors contributing to credit default among women
entrepreneurs in Tanzania. The research mainly based on three factors which are diversion of
fund, inferiority complex and family influence. The research based on this factors because most
of the researcher have identified other factors which cause credit default and influence credit
behaviour but these factors were not discussed.

In order to accomplish this study, there was one main objective which is to assess factors
contributing to credit default among women entrepreneurs in Tanzania and three specific
objectives which were to assess the impact of inferiority complex on credit behaviour among
women entrepreneurs, to assess the impact of family influence on credit behaviour among
women entrepreneurs and to assess if there is relationship between diversion of fund and credit
behaviours among women entrepreneurs.

The findings were that family influence has impact on credit behaviour, this is because if the
family influence a member to use the loan the loan cannot be repaid on time or others can find
difficult to repay the loan. Also inferiority complex have no impact on credit behaviour because
when women have fear they cannot conduct their business well but they can manage to repay
the loan. And finally there is a relationship between diversion of fund and credit behaviour
because when using loan for other purpose the chance is late payment is high as well as the
chanced for defaulting.
5.1 Conclusion
From the research problem which was loan default among women entrepreneurs in Tanzania
is a common issue that is influenced by a variety of factors, including limited access to finance,
inadequate financial management skills, and unfavourable loan terms. According to (Global
economy, 2021) the percentage of non-performing loan of Tanzania commercial bank is 7.63
% of all bank loans and according to (Janeth, 2021) percentage of individual women
entrepreneurs defaulting is 50%. The researcher can conclude that other factors which conclude
mostly to credit behaviours are diversion of fund, family influence . In which diversion of fund
have a positive relation of 92% any family influence have impact on credit behaviour as well
as inferiority complex.

5.2 Recommendations
The following should be done so as to reduce loan default among commercial banks in
Tanzania;

Strengthen financial management skills: Providing targeted financial literacy training to

women entrepreneurs can help them with essential skills to effectively manage funds, reduce
diversion, and make informed credit-related decisions. These programs should emphasize
budgeting, cash flow management, and financial planning to enhance financial discipline.

Developing self-confidence and negotiation skills: Conducting workshops and mentorship

programs focused on building self-confidence and negotiation skills can empower women
entrepreneurs and create favourable credit terms. These initiatives should provide practical
training on effective communication, self-advocacy, and understanding credit agreements.

Raise awareness and challenge societal norms: Conducting awareness campaigns that
challenge societal norms and stereotypes can help combat inferiority complex among women
entrepreneurs. These campaigns should promote women's economic empowerment, challenge
gender biases, and highlight the value of women's contributions to the economic growth.

Strengthen monitoring and enforcement: Regular monitoring and enforcement of regulations

pertaining to credit practices can help mitigate the diversion of funds and protect women
entrepreneurs from unscrupulous practices. Financial institutions should comply with ethical
lending.
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APPENDIX
QUESTIONAIRE
My name is WALDA HAMAD MSANGI pursuing Bachelor of Science in Accounting and
Finance, third year at Ardhi University. I am currently doing research on FACTORS
CONTRIBUTING TO CREDIT BEHAVIOURS AMOUNG WOMEN ENTERPRENEURS
IN TANZANIA. I kindly request your cooperation in answering the questions. Your answers
will be kept as a confidential information and be used for research purpose only.

Thank you.

SECTION A: MULTIPLE CHOICE QUESTIONS

CONTROL VARIABLES
1. What is your age?
a) 18-24
b) 25-34
c) 35-44
d) 45 and above

2. What is your marital status?

a) Single
b) Married
c) Divorced
d) Widowed

3. What is your highest level of education?

a) Primary education
b) Secondary education
c) Vocational training
d) University degree or higher

4. What type of business are you conduct?

a) Retail
b) Food and beverage
c) Manufacturing or production

5. What level of income that you usually obtain for your business per month?
a) Below TZS 500,000TZS
b) 500,000 - TZS 1,000,000
c) TZS 1,000,000 - TZS 2,000,000
d) TZS 2,000,000 and above

6. Where did you usually obtain your loan from?

 a) Commercial bank
b) Microfinance institution
c) Cooperative society
d) Government agency
e) Non-Government Organizations (NGOs)

7. How do you perceive the interest rate charged by the lender when obtain credit for
your business?
a) High
b) Low
8. What is the level of credit that you usually obtain for your business?
a) Below TZS 500,000
b) TZS 500,000 - TZS 1,000,000
c) TZS 1,000,000 - TZS 2,000,000
d) TZS 2,000,000 and above

SECTION B: INFERIORITY COMPLEX

9. To what extent do you feel confident in your entrepreneurial abilities?

a) Very confident
b) Somewhat confident
c) Neutral
d) Somewhat lacking confident
e) Very lacking confident
10. Have you ever experienced feeling of inferiority or self-doubt regarding your
business skills?
a) Yes
b) No
11. Do you believe that your gender has an impact on how others perceive your
creditworthiness?
a) Yes
b) No

SECTION C: DIVERSION OF FUND

12. Have you ever used your loan for any other purpose rather than your business?
a) Yes
b) No
 13. From question 12 above, what were the reasons to divert your fund?
a) Personal Expenses
b) Family related expenses
c) Emergency situation

SECTION D: FAMILY INFLUENCE

14. Did any family member provide financial assistant or investment to start your
business?
1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.

15. Do you usually consult your family members before making credit related
decision?
1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.

16. Have any family members co-signed loans or acted as guarantors for your
business?
1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.

17. Does your family influence you on how you can manage and use your loan?
1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.

18. Does your family decisions and beliefs affect your credit score?
1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.

19. How often do you consistently pay your credit obligation on time?
 1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.

SECTION E: CREDIT BEHAVIOUR

20. Have you ever utilized the maximum available credit limit on one or more of your
credit account?
1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.

21. Have you ever defaulted on credit payment?

1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.

22. When repaying a loan, how frequently do you making minimum payment?
1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.

23. Have you ever exceeded the credit limit on any of your credit account?
1 = never,
2 = Seldom,
3 = Sometime,
4 = Often,
5 = Always.