Motivations and Challenges of Youth Entrepreneurs in Tanzania to Participate in Crowdlending based Financing Platform

Abstract

This study explores the factors influencing youth entrepreneurs in Tanzania to adopt crowdlending as an alternative source of finance and the challenges they encounter in the process. Using a qualitative case study approach, interviews were conducted with 15 young entrepreneurs who successfully accessed loans through a crowdlending platform. Thematic analysis was conducted through transcription, coding, and theme development processes. The findings indicate that financial necessity and limited access to traditional banking were the primary motivators for adopting crowdlending. However, the study also found that entrepreneurs often have a limited understanding of the crowdfunding process, as many access the platform through intermediaries. Additionally, the study identifies high interest rates and transaction costs imposed by financial intermediaries as major barriers to the perceived benefits of crowdlending. The findings underscore the importance of tailored financial literacy initiatives, user-centred platform design, and policy frameworks to unlock crowdlending’s potential for inclusive youth entrepreneurship in Tanzania. 

Keywords: {'name': 'Crowdlending'}, {'name': 'youth entrepreneurs,'}, {'name': 'motivations'}, {'name': 'financial intermediaries'}

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Nsubili Isaga
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