Abstract:
Micro-credit funding for income generating activities is one of the current anti-
poverty measures that are adopted by many developing countries to alleviate poverty
amongst the poor. The study was conducted in Mbeya Municipality to asses the
overall impact of credit to borrowers. Both questionnaire and personal observation
methods were used to collect data amongst borrowers in Mbeya Municipality. A total
of 100 respondents were interviewed, and collected data were analyzed using
Statistical Package for Social Sciences (SPSS) computer programme. The results
show that, loans for income generating activities have overall positive effect on the
borrowers. The performance among borrowers was analyzed by using the proper
evaluation of the difference before and after changes resulting from the credit. The
results indicate that the major sources of credit agencies are from PRIDE and NMB.
64% of the respondents generate income beyond the poverty line because borrowers
have earned substantial amount of income. 70% of respondents’ have high and
modern standard of houses assets, kitchen facilities, media and communication items
and transportation facilities. Furthermore, 58% of respondents project the life span of
their business to be more than 8 years. This implies that the performance of income
generating activities was effective. Factors that contributed to this positive impact
include suitable credit procedures and conditions of some of financial institutions
that are flexible and affordable by the poor people at the grassroots. These features
are reflected by the size of the loans taken, the type of projects for the targeted
population and the modes of loan repayments. Basing on the on the finding of this
study it is recommended that, in order to support the poor people at the grassroots
level loans agencies should review their credit procedure so as to meet the demand of
borrowers.
