Micro financing in Tanzania

By

ACKNOWLEDGEMENTS

My thanks go out to all who have helped me complete this study and with whom this project may have not been possible. In particular, my gratitude goes out to friends, facilitator and family for extensive and helpful comments on early drafts. I am also deeply indebted to the authors who have shared my interest and preceded me. Their works provided me with a host of information to learn from and build upon, also served as examples to emulate.

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DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with university.

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TABLE OF CONTENTS

ACKNOWLEDGEMENTSii

DECLARATIONiii

CHAPTER 1: INTRODUCTION1

Background1

Rationale1

Aims and objective2

CHAPTER 2: CASE BRIEF3

Description of the situation3

Assumptions4

Scope of the study5

CHAPTER 3: PROBLEM STATEMENT AND PLAN OF ANALYSIS6

Problem statement6

Plan of analysis6

Structure of the work7

Chapter 4: Finding and Analysis7

Chapter 5: Proposed solution to problem7

REFERENCES8

CHAPTER 1: INTRODUCTION

Background

Access to credit by poor people is always challenging and this study aims to analyze the Situation. Concerns about the plight of the poor especially in Tanzania have long been in the lime light and won the interests of many. The heightened interests this topic has created (and still does), to a greater extent influenced the formation of several governmental and non-governmental organizations/agencies that work tirelessly to seek intervention in many forms to reverse the pain poverty inflicts on the poor (Ledgerwood 2006 44).

Rationale

There were multiple factors that distinguished MFIs in Tanzania from local banks, commercial banks, and other traditional financial service providers, in terms of structural operations and offerings. The delivery target for all these financial groups in Tanzania varies greatly with MFIs focusing primarily on the poor. Even though it was difficult finding data on the exact extent of MFIs loans in relation to the poverty levels of their clients, all observers support the claim that MFI clients were poorer than the clients of other financial organizations because of the differences in their operational business models and primary goals. MFIs in Tanzania began operations with the primary objective of providing credit to the poor (Wright 2000 77). As a result, it became an attractive avenue to the poor who sought to obtain financial resources.

Compared to other financial institutions, MFIs in Tanzania and other developing economies operated with a better understanding of the micro-finance market environment. MFIs in Tanzania provided better services and products to suit the needs of the poor better than traditional commercial banks, especially in regards to incorporating micro-finance programs in their offerings. Related to the latter, the United Nations Capital Funds Development (UNCFD) declared that, commercial opportunity in micro-finance was catching the interest of mainstream banking.

Aims and objective

The aim of the work is to understand the effects of micro financing in Tanzania, with following objectives:

To understand how MFIs carry out their commitment to help the ...