Social Capital’s Impact on Informal Financial Accessibility among Incubated Small and Medium Entrepreneurs in Tanzania

Social capital is expected to contribute positively to entrepreneurs’ access to finance. The study in thisarticle investigates the impact of incubated entrepreneurs’ social capital on their informal financialaccessibility. Social capital was measured by benefits emanating from bonding, bridging and linkingsocial networks. The study uses dependent variables such as informal financial accessibility andindependent variables such as bonding social capital, bridging social capital, and linking socialcapital, employing relevant information from 117 Tanzanian incubated entrepreneurs. Using SPSSVersion 20, multiple regression analysis was employed to test the impact of bonding social capital,bridging social capital and linking social capital on access to informal finance. The findings suggestthat bonding and bridging social capitals have a positive impact on access to informal finance.Linking social capital has insignificant effects on access to informal finance. This paper suggestspolicymakers and other stakeholders should focus on building and improving bonding and bridgingsocial networks of incubated small and medium entrepreneurs to increase their informal financialaccessibility.