Title: Explores the Challenges faced by Tanzanian SMEs in utilizing Documentary credit
Authors: David Ngabo Chiragi, Tumaini Shabani Gurumo, Keneth Oliver mbaga ,Chesco Flugence Komba
Volume: 8
Issue: 10
Pages: 43-50
Publication Date: 2024/10/28
Abstract:
: This study explores the challenges faced by Tanzanian Small and Medium Enterprises (SMEs) in utilizing documentary credit as a trade financing tool. Despite its potential to mitigate risks and facilitate international trade, many SMEs in Tanzania struggle to effectively leverage this instrument. Key challenges identified include limited awareness and understanding of documentary credit procedures, high associated costs, stringent banking requirements, and inadequate support from financial institutions. Furthermore, infrastructural issues, such as limited access to reliable communication networks and technology, exacerbate these difficulties. By examining these obstacles, the study aims to provide insights for policymakers and financial institutions to develop strategies that enhance the accessibility and usability of documentary credit for Tanzanian SMEs, thereby promoting their growth and participation in global trade.