Corruption In The Procurement Process And The Performance Of Small And Medium Enterprises: A Case Study Of Two Selected Business Enterprises In Monduli Division arusha District In Tanzania

ABSTRACT

This research on "Corruption and the Performance of Small and Medium Scale

Enterprises" was carried out in TANCEED and Shoprite in Monduli, Tanzania purposely

to; find out the role of procurement on the performance small and medium enterprises; to

find out the challenges of procurement and causes of corruption; and to suggest possible

solutions to the challenges experienced in procurement. To figure out the problem,

literature was reviewed on the main variables of the study to enrich field responses. Both

qualitative and quantitative research designs were relied upon, whereby questionnaires

and interviews were used on a sample of 30 respondents drawn from the audit,

procurement and accounts departments.

It was established that procurement plays a role of protecting against loss, promoting an

effective supply environment, enhancing growth of business, promoting on going training

for efficiency, promoting market potentials, and bridging market linkages. The study

further revealed that challenges of procurement include low ability to establish strong

connections, unsupportive bidding structures, tight foreign competition, strict government

procedures, and unreliable statistical information. The study also suggested that for

procurement to effectively promote the performance of small and medium enterprises

there is a need for a mutual enforcement of procurement rules, government support,

increased information access and punishing unethical behavior.

The study concluded that, procurement as a process ought to be a transparent process if

corrupt practices are to be countered and ethical practices need to be observed to

eliminate and wipe out practices of corruption that prevent advancement of SMES in the

procurement business.

The study recommends; creating clear policy guidelines; joint formulation of sustainable

practices; building stakeholders through promoting transparency; comprehensive effort in

assessment of a procurement; collaboration to develop risk taking abilities and a smooth implementation of capacity development.

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