Bridging Financial Literacy Gaps for Women Owned SMEs: Insights from Morogoro Municipality, Tanzania

Abstract

This study investigated the financial literacy levels among women-owned small and medium enterprises (SMEs) in Morogoro Municipality, Tanzania, revealing significant gaps in financial knowledge and management practices. Using a survey methodology, data were collected from 142 female entrepreneurs through structured questionnaires and analyzed using descriptive statistics via SPSS software. The analysis uncovered a moderate overall level of financial literacy but identified critical deficiencies in key areas. Notably, 56% of respondents lacked knowledge of optimal investment practices, highlighting a major obstacle to capital growth and long-term wealth accumulation. Weaknesses in financial planning were also prevalent, with 55% of participants not maintaining written business objectives, and 50% failing to compare business performance with their set goals—exposing a lack of strategic foresight crucial for sustainable growth. The study further found that 69% of the businesses operated in the low-margin trading sector and were largely sole proprietorships, which limited their capacity for growth and diversification. A significant concern emerged regarding risk management, where 73% of the respondents lacked business insurance knowledge, and 83% were unfamiliar with life insurance, leaving both their businesses and personal welfare highly vulnerable to financial shocks. Despite these alarming gaps, the study identified a basic understanding of core financial concepts, indicating that women entrepreneurs could improve their financial decision-making with targeted interventions. To address these deficiencies, the study recommended a multifaceted strategy that included financial literacy training programs tailored to the specific needs of women-owned SMEs, promoting financial inclusion through accessible loan products and services, and fostering a supportive ecosystem with mentorship programs and mobile financial resources. By addressing these gaps, women entrepreneurs could be better positioned to achieve sustainable business growth and contribute significantly to the economic development of their families and the broader region.