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Challenges of Globalisation for Smes in Tanzania

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THE CHALLENGES OF GLOBALIZATION FOR SMES IN TANZANIA
Prepared by Tanzania Chamber of Commerce Industry and Agriculture
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1. Introduction: Definitions
 

Globalization: Every one of 2,822 academic papers written on globalization and 589 new books published on the subject in 1998 had different definitions of globalization. An economic phenomenon, involving the increasing interaction, or integration, of national economic systems through the growth in international trade, investment and capital flows. It also includes a rapid increase in cross-border social, cultural and technological exchange as part of the phenomenon of globalization.
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Definitions:
Small and Medium Enterprises (SMEs):


There is no consensus of SME definition as various countries had different definition depending on the phase of economic development and their prevailing social conditions. In this, various indexes are used by member economies to define the term such as number of employees, invested capital, total amount of assets, sales volume (turnover) and production capability.
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2. SMEs in Tanzania


In the context of Tanzania, micro enterprises are those engaging up to 4 people, in most cases family members or employing capital amounting up to Tshs.5.0 million. The majority of micro enterprises fall under the informal sector. Small enterprises are mostly formalized undertakings engaging between 5 and 49 employees or with capital investment from Tshs.5 million to Tshs.200 million. Medium enterprises employ between 50 and 99 people or use capital investment from Tshs.200 million to Tshs.800 million. This is illustrated in the table below:
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SMEs in Tanzania, categories
Category Micro enterprise: Small enterprise: Medium enterprise: Large enterprise: Employees 1–4 5 – 49 50 – 99 100 + Capital Investment in Machinery (Tshs.) Up to 5 mil. Above 5 mil. to 200

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