Adaptation and Barriers of E-commerce in Tanzania Small and Medium Enterprises

Abstract

E-commerce has been predicted to be a new driver of economic growth for developing countries. The SME sector plays a significant role in its contribution to the national economy in terms of the wealth created and the number of people employed. Small and Medium Enterprises (SMEs) in Tanzania  represent the greatest share of the productive units of the Tanzanian economy and the current national policy directions address ways and means of developing the capacities of SMEs. Many factors could be responsible for the low usage of e-commerce among the SMEs in Tanzania. In order to determine the factors that promote the adoption of e-commerce, SMEs adopters and non-adopters of e-commerce were asked to indicate the factors inhibiting the adoption of e-commerce. The results show that technical barriers are the most important barriers followed by legal and regulatory barriers, whereas lack of Internet security is the highest barrier that inhibit the implementation of e-commerce in SMEs in Tanzania followed by limited use of Internet banking and web portals by SMEs. Also, findings implied that more efforts are needed to help and encourage SMEs in Tanzania to speed up e-commerce adoption, particularly the more advanced applications

Key words— e-commerce adoption, e-commerce adoption barriers, Small and Medium Enterprises, e-commerce adoption in SMEs in Tanzania