Abstract:
The study was conducted in Kilosa district. The overall objective was to show the
contribution of MFIs in poverty alleviation through women IGAs. The study aimed at
identifying MFIs operating in the study area; common IGAs performed by women
groups, assessing the contribution of MFIs towards poverty alleviation and analyzing
factors affecting the performance of women’s IGAs.
Cross-sectional research design with
structured questionnaire was used to collect primary information from 100 respondents
.
Secondary data were obtained from various reports and literature surveys. MFIs identified
include FINCA, WDF and NMB. Common IGAs found were retail shop, cooked food
vending, selling used clothes, local brews, charcoal and firewood, fishmongers, and
nursery school. The results indicate that 78% of borrowers and 56% of non-borrowers
started IGAs to supplement family income and source of employment respectively. About
54 % of borrowers and 68% non-borrowers used less than Tshs 100 000 as capital to start
IGAs from MFIs whereas non-borrowers from own savings and relatives.
Gross Margin
analysis showed that, incomes earned by 40 % of borrowers and 56% of non-borrowers
range between Tshs 50 000 – 100 000. T-test analysis indicated that, borrowers’ income
was significantly higher than the non-borrowers (p < 0.05). On average borrowers spent
T.shs 63 620; 17 801 and 3 715.33 per month to purchase family food; pay school fees
and health services respectively. Non-borrowers spent Tshs 34 020, 8 280 and 1 980 per
month for the same items. This complies with alternate hypotheses that MFIs contribute
towards poverty alleviation in selected items. Furthermore, competition among similar
business, lack of education on business management, high income tax and lack of capital
were identified as factors affecting the performance of IGAs. The study recommends
MFIs should provide sufficient credit to their clients; group lending should be revised;
provide training to borrowers.
