The role of small businesses in poverty alleviation: the case of Dar es Salaam, Tanzania

The role of small businesses in poverty alleviation: the case of Dar es Salaam, Tanzania

Published Jan 2008

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Small businesses alleviating poverty in Tanzania

This document cover the following issues:

  • income generation, employment creation, salaries, profit margin and profitability
  • socio-economic factors such as gender, owner’s level of education, motivation for starting the business, sources of initial capital, owner’s prior activity, and use of technology
  • the impact of business formality on profit margins and employment creation including issues of registration, licensing, and paying taxation
The survey of 162 micro enterprises and 63 small scale enterprises in Dar es Salaam found that:
  • the average incomes generated were above the basic and food poverty lines, more so for the small scale enterprises than the micro
  • business performance was positively related to the size of the firm
  • socio economic factors influenced profit margins and employment creation
  • the potential to generate profit lay predominantly with formal rather than informal enterprises

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