Factors Affecting Small and Medium Transport Enterprises in Njombe and Mbeya Districts, Tanzania

Abstract

The transport sector is vital to Tanzania's economy, significantly contributing to GDP and employment. However, a high failure rate among transport businesses, particularly within their first three years of operation, poses a critical challenge. This study investigates the factors influencing the sustainability of transport businesses, focusing on financial resources, regulatory environment, infrastructure quality, and management practices. The study was guided by the Resource-Based View (RBV) theory; a quantitative approach was employed, sampling 140 respondents from the Njombe and Mbeya regions. Data collection involved structured questionnaires, and statistical analyses included correlation and regression methods. The findings reveal significant barriers to sustainability, including limited access to financial resources, regulatory challenges, poor infrastructure, and inadequate management skills. Financial practices were notably underutilised, with 51.8% of businesses not adhering to financial management standards. Infrastructure deficits, especially in rural areas, emerged as a critical obstacle, with 93.7% of respondents identifying poor road conditions as hindering profitability. Regulatory constraints also pose significant challenges, with 63.4% of respondents dissatisfied with the regulatory environment. The study concludes that addressing these issues is crucial for enhancing the longevity of transport businesses in Tanzania. Recommendations include improving access to financial resources through government support programs, investing in infrastructure development, streamlining regulatory policies to favour business operations, and promoting capacity building for management teams. These measures are imperative for fostering a sustainable and strong transport sector, ultimately contributing to Tanzania's economic development and achieving broader socio-economic goals.