Exploring the Profitability, Supporting Functions and Business Environment of Small and Medium Forest-Based Enterprises in Ruvuma, Tanzania

Even though forest-based enterprises are prominent in the Ruvuma region as they are beneficial to the community in both an economic and social sphere, little is known about their profitability, supporting functions and business environment. Therefore, the objective of this study was to analyze the profit and determine supporting functions and the business environment of the SMEs along forest-based value chains in the Ruvuma region. A cross-sectional research design was adopted. Two districts (Songea urban and rural) were purposively selected due to their high forest value chain potentials and high availability of Small and Medium Enterprises. About 120 entrepreneurs who were dealing with forest products were randomly selected for this study. Interviews and unstructured questionnaires were used to obtain data on the profit metrics, supporting functions and the business environment of the SMEs. Descriptive, Inferential (Binary Logistic Regression) and Content analysis were performed on the collected data. The study revealed that the SMEs found along the forest-based value chain which was later categorized according to the nature of the products they produce and trade varied in their profitability (i.e., wild tea leaves 73%, beekeeping 54%, mushrooms 48%, bamboo 27%, fire sticks 12%, and timber -13%), their supporting functions included Capacity building, Entrepreneurial relationships, Financing, and Entrepreneurial Research and Development and that there is an existing understanding on their business environment i.e., the laws, policies and regulations which were at play. These findings can be used for different purposes such as a basis for further research on the forest-based entrepreneurship industry, education provision to the entrepreneurs, policy formulation for the benefit of entrepreneurs and allocation of funding to these enterprises