Abstract:
The aim of this study was to assess the challenges facing small scale entrepreneurs in accessing loan
from banks at Ngongongare, Meru district, Arusha region in Tanzania. A sample size of 100 respondents was
used, whereby 65 respondents filled the questionnaire and returned. Descriptive statistics was used to analyze
and tabulate data. The following findings were obtained: Collateral is a challenge to small entrepreneurs in
accessing loan from the bank; the cost of transaction was found to be high and interest rate was also found to be
high; the availability of accounting information was difficult to be obtained from small entrepreneurs so as to
grant credit facilities and also the study revealed that capital for SSE is particularly from other sources like
SACCOS. The study concluded that collateral, high interest rates, lack of adequate accounting information
were the challenges facing small scale entrepreneurs in accessing loans from banks. The researcher
recommended that banks should lower their interest rates and also grant loans on business asset and income as
collateral securities. In addition, small scale entrepreneurs should be given some training in form of seminars
through trade organizations. The study further recommends future researchers to undertake a comparative
study between small scale entrepreneurs and small and medium entrepreneurs
