Abstract
Local Civil Contractors (LCCs) in Tanzania play a vital role in the national construction industry but face persistent challenges in accessing credit facilities essential for their operations and growth. This study examined how the financial external factors influence LCCs’ access to credit facilities, focusing on coercive, mimetic, and normative institutional pressures, as conceptualised within Scott’s institutional theory. A mixed-methods approach was adopted, combining quantitative data from 353 LCCs and qualitative insights from 15 financial sector key informants across six major regions in Tanzania. Descriptive statistics and multiple linear regression analysis were employed to assess the strength and direction of each regulatory dimension. The findings revealed that mimetic pressures (β = 0.424, p < 0.001) were the strongest positive predictors of access to financial services, indicating that peer learning, imitation of successful contractors, and network influence significantly enhance financial inclusion. Coercive factors (β = 0.292, p < 0.001), including regulatory requirements related to licensing, audits, and reporting, also positively influenced access, though their effect was more variable. In contrast, normative pressures (β = –0.056, p = 0.033), such as rigid professional standards and documentation norms, had a statistically significant negative effect, implying exclusionary tendencies for smaller or informal contractors. The study recommends regulatory simplification, tiered compliance frameworks, strengthened peer learning platforms, and alternative credit assessment models. These findings underscore the need for context-sensitive regulatory reforms that align with LCCs’ operational realities, thereby improving financial access, competitiveness, and the contribution of local contractors to Tanzania’s construction sector.