Abstract
The presence of social capital has been instrumental for effective performance and development of business associations, the private sector and the economy at large. Sometimes social capital has been equated to networking and associational undertakings in socio-cultural and economic settings. This study analyses the extent to which social capital is experienced in selected business associations of food processing SMEs in Tanzania and Rwanda in terms of trust and social cohesion, collective action and information sharing. Target population of the study was food processing SMEs. Sample size was 145 SMEs. Responses of the subjects were collected through questionnaires and comparative analysis was used. Based on World Bank Declaration of twin initiatives which states that: “Institutional reform and the promotion of social capital are key elements on the road to empowerment”? It is observed that Rwanda had put the twin initiative into practice and enabled the shift of socio-cultural and economic paradigm. It is concluded that Rwandan business associations have more social capital than Tanzanian ones and so would influence the private sector and the economy. The implication is that Rwanda as a country with organised and empowering social capital structures can develop faster than Tanzania.