Microenterprise finance in Tanzania: case study and policy design analyses
Loading...
Date
2001
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Sokoine University of Agriculture
Abstract
The purpose of this study was to assess the status and provision of micro-finance
services in Tanzania and suggest necessary improvements in national microfinance policies and design of micro-finance programmes. Specific objectives of the
study were to (1) assess the status and provision of micro-finance services in
Tanzania basing on secondary information and analyses of selected case studies,
(2) evaluate the status of accessibility to micro-finance (credit) of selected MEs in
Dar es Salaam region, (3) determine the role of credit in micro-enterprises
performance in terms of changes in employment creation and income generation,
(4) analyse factors which determine performance of micro-enterprises, and (5)
following
achievement of the above objectives, recommend necessary
improvements in the design of national micro-finance policies and individual
programmes. Data for the study were collected from various primary and secondary
sources including, The Planning Commission, Vice President’s Office, Bank of
Tanzania (BOT), and National Micro-finance Bank (NMB). More data were collected
through MFI and ME level surveys from PRIDE Tanzania, Presidential Trust Fund
for Self Reliance (PTF), Huduma Ya Maendeleo Ltd (HYM) and their clients in Dar-
es-Salaam region. Major tools of analyses for the study were descriptive statistics
and multiple linear regressions. Results of the study confirmed that micro-finance
programmes operated by the MFIs in the study areas have been designed basing
on policies enshrined in the New Micro-finance Approach such policies have
contributed significantly to financial successes in many parts of the World. They
include: emphasis on group liability in lieu of formal collateral; charging of
commercial interest rates instead of subsidized rates, effecting intensive loan
collection, and demanding contributions towards insurance funds. Micro-enterprises
studied have contributed substantially to livelihood of families of the micro-
enterprise owners. Access of MEs to capital improves income generation and
labour employment capacity of ME although only to a small degree. Capital has also enabled MEs to operate more smoothly and more efficiently.
Recommendations of the study for policy relate to improvements in performance of
the micro-enterprise sector through provision of reasonable amounts of start-up
capital, and, provision of business management and marketing training, for the
purpose of assisting ME’s growth and development into the formal sector. It is also
recommended that, activities of MFI should be regulated through a micro-finance
board that shall develop and promote rules and regulations for self-guarding
interest of the various stakeholders in the micro-finance sub-sector.
Description
MASTERS DISSERTATION
Keywords
Microenterprise, finance, policy, Tanzania, Bank of Tanzania