Author: Dr. Bravious Felix Kahyoza (PhD), FMVA, Co-Author: Dr. Jasinta Msamula Kahyoza (PhD)

TICGL’s Economic Research Centre has published a new discussion paper authored by Dr. Bravious Felix Kahyoza (PhD, FMVA) and Dr. Jasinta Msamula Kahyoza (PhD), exploring how financial modelling enhances investment decision-making and performance among Tanzania SMEs.

The study reveals that while the adoption of financial modelling remains moderate (mean index 2.69/5), its impact on decision quality and enterprise growth is significant. Using data from 200 SMEs in Dar es Salaam and Arusha, the research found that firms applying modelling tools such as discounted cash flow (DCF) and net present value (NPV) analyses achieve better investment outcomes and higher sales growth.

Key findings include:

• Financial literacy has a strong positive effect on modelling adoption (β = 0.391, p < 0.01).
• Decision quality improved significantly through modelling use (R² = 0.462).
• Enterprise performance rose with better investment decisions (R² = 0.400).
• Smaller firms benefit the most, showing resilience despite limited resources.

The paper calls for policy integration of financial modelling training in SME support programs, digital tool subsidies, and PPP-led innovation hubs to accelerate the contribution of SMEs to 45% of Tanzania’s GDP by 2030—in line with the Third National Five-Year Development Plan (FYDP III).

This research provides actionable insights for policymakers, investors, and SME leaders working to strengthen Tanzania’s private-sector-led growth.

TICGL Research Discussion Paper Highlights

Download and read the full paper:
“The Impact of Financial Modelling on Investment Decision-Making and Performance in Tanzanian SMEs”
Published by TICGL | Economic Research Centre