This paper examines the influence of socio-cultural determinants (SCDs) on the choice of
enterprise financial sources (EFSs) among the Chagga and Sukuma small and medium
enterprises (SMEs) in Tanzania. A survey of 254 owner-managers was conducted in
Kilimanjaro and Mwanza regions in order to collect quantitative data and case studies for
qualitative data. Descriptive and Binary Logistic Regression Model (BLRM) analysis were
employed to analyze quantitative data and case studies analysis for qualitative data. The
results show that borrowed fund from financial institutions, borrowed fund from
family/relatives/ and or friends, personal savings and trade credit demonstrate positive effect
while family assistance and economic groups show negative effect on capital growth among
the Chagga and Sukuma SMEs in Tanzania. However, results show variation on the effect of
EFSs on capital growth between the Chagga and Sukuma in which EFSs have higher
contribution to capital growth among the Chagga than Sukuma SMEs. This study concludes
that SCDs have effect on EFSs and capital growth and its implication is that individuals
exposed to such SCDs are likely to grow capitals better than individuals under exposed.
Through these findings the study recommends that policy makers should consider the effect of
SCDs on the choice of EFSs among Tanzanian SMEs.