Does a Loan have an Impact on Attitude to Risk among Micro-Entrepreneurs in Tanzania? Evidence from Morogoro and Mvomero Districts
The study examines loan impact on attitude to risk among micro-entrepreneurs in Tanzania. It uses evidence from Morogoro and Mvomero districts. The study used primary data, which came from a survey conducted through questionnaires. The study found that the repayment motive outweighs the entrepreneurial acumen induced by the loan, making operators who have borrowed more risk averse than potential borrowers. Those in rural areas are even more risk averse. It was found that this hinders initiatives to go for larger loans in the subsequent rounds and retards the expansion and growth of micro-enterprises. This finding points to the need for new repayment mechanisms that reduce the trade-off between the maximization of repayment rates and further development of the entrepreneurial spirit.