Microfinance Services and Women Economic Empowerment in Arusha District Council

Abstract

Women’s economic empowerment is one of the highly debated development concern in Tanzania. Women’s access to microfinance services is considered as a doorway for empowering women. Conversely, it is also argued that Microfinance Institutions (MFIs) are extracting money from poor women through high interest rates, causing higher social pressure and in some cases leading to domestic violence. The objective of this paper was to examine whether and to what extent women’s access to microfinance services has facilitated this course. The study also sought factors affecting women’s access to MFIs’ services. A cross-sectional research design was adopted, and 120 women were involved in the study whereby 60 were beneficiary of MFIs services and the rest were non beneficiaries. The study found that onethird of respondents was categorized into higher level of empowerment whereas 41.5% were in the low empowerment category. The study also found that there was an association between women access to MFIs and their empowerment (P<0.001), respondents marital was also associated with their economic empowerment (P<0.001). The paper concludes that women access to MFIs has potential to contribute to women economic empowerment although it is faced with many challenges including high interest rates. It is recommended that government and non-governmental agencies and organisations involved in MFIs services should scale up their activities to reach more women while looking on better ways to manage challenges encountered by rural women including the higher interest rates.