Page 55 - Business_Studies_F5

Student's Book Form Five

Chapter summary

1. The medium-sized businesses are classified based on the number of employees
and capital invested. In Tanzania, a medium-sized business has employees
ranging 50 to 99 and capital invested ranges from TShs. 200 million to TShs.
FOR ONLINE READING ONLY
800 million.
2. Existence of many medium-sized business enterprises in the country lowers
the unemployment rate to the society because they employ many people as the
workforce.
3. Medium-sized businesses need finance for carrying out various business activities.
These funds are used as working capital and for future expansions or meeting
other maturing obligations.

4. Leasing, Sale and lease-back of non-current assets, sale of non-current assets
and retained earnings are some of the internal sources of finance while share
capital, venture capital, overdrafts, secured loans, debentures, crowd funding,
and grants are some external sources of finance for medium-sized businesses.

5. Business enterprises may choose any of the sources of financing businesses
depending on different factors such as availability, potentiality, formalities to
be followed, and accessibility of the source.

Revision exercise

1. Financing medium-sized businesses seems to be advantageous to the owners,
as without money the business will automatically succumb. Reflecting on this
statement, explain the advantages of finance to medium-sized business.
2. Critically analyze the key features of a medium-sized business in Tanzania.

3. Mr. Majuto worked as a gardener in one of the five-star hotels in Tabora Region
five years ago. However, his monthly salary was not adequate to meet his family
expenses so he quit his job. He slowly ventured into the farming business. He
currently employs around 61 employees and he has won TShs. 200 million from
one of the non-government organisations operating in Tanzania after submitting
his business proposal to increase his production capabilities.

(a) State the source of finance used by Majuto.
(b) What are the advantages and disadvantages of the source identified in part (a)?

Business Studies for Advanced Secondary Schools 46

30/06/2024 19:02:32
Business Studies FORM 5.indd 46 30/06/2024 19:02:32
Business Studies FORM 5.indd 46