The impact of microfinance institutions on performance of microenterprises and house hold welfare: a case of Mufindi community bank, Iringa region
| dc.contributor.author | MHIMBA,FESTO MODESTUS | |
| dc.date.accessioned | 2025-02-18T10:07:22Z | |
| dc.date.available | 2025-02-18T10:07:22Z | |
| dc.date.issued | 2005 | |
| dc.description | Thesis | |
| dc.description.abstract | Recently, development practitioners have come to realize that the poor of the poorest can indeed make effective use of credit to raise their income and get access to many welfare indicators such as food and other necessities. But knowledge about the achievements of such initiatives, though are of interest to many stakeholders, remains undocumented in many parts of the world. This study, therefore, was an attempt to assess the impact of credits administered by Mufindi Community Bank (MuCoBa) on performance of micro enterprises and improvement of the household welfare. Specific objectives were to: (i) establish micro enterprises profile in the District, (ii) evaluate the impact of credits on micro-enterprises performance and market participation, (iii) assess the impact of credits on household welfare, and (iv) assess factors that would enhance impact of Mufindi Community Bank’s credit on beneficiaries. Cross-sectional surveys were conducted to collect primary data from 151 respondents of whom 88 were credit participants, 35 had qualified to get credit but had yet to start and 28 had secured credits for farm activities. Semi-structured and structured questionnaires were used. Secondary data were secured from the bank and government offices. The bank provides credit to support legally existing economic enterprises that should have been in operation more than a year. For easy interpretation of data, descriptive and quantitative analytical techniques were employed. Common types of enterprises identified are petty trade/utility services, agro marketing and manufacturing/artisans. The findings indicate a statistically significant difference (p<0.0001) between credit participants and non-participants in terms of average annual profit, available working capital arid value of selected durables of household assets. It is noteworthy report here that start up capital, initialiii credit, available working capital, family size, type of enterprise and monthly turnover affected positively the performances (profit) of the enterprises. Also, credit beneficiaries were able to employ (40%), access distant markets (18%), acquire high value household assets and improved their diets (14.4%) comparatively to non beneficiaries. The differences in enterprise performance observed suggest that credits are important to improve performance of micro-enterprises and hence household welfare. However, nature of collaterals, high borrowing transaction costs and interest rates suggest that the bank has replaced the commercial ones referring to the objectives of the bank. Hence, its impact on welfare indicators is very marginal, and equally important, the rural poor of the poorest have been excluded from borrowing. It is evident from the findings that flexibility of the bank through revising of their policies would be necessary to reach more farmers and small entrepreneurs by encouraging saving and attracting borrowers. The government should continue to support micro-finance institutions such as Mufmdi Community Bank through capitation and maintained rural roads for comprehensive outreach. | |
| dc.identifier.uri | https://www.suaire.sua.ac.tz/handle/123456789/6567 | |
| dc.language.iso | en | |
| dc.publisher | Sokoine University of Agriculture | |
| dc.subject | Microfinance institutions | |
| dc.subject | Microenterprises | |
| dc.subject | House hold welfare | |
| dc.title | The impact of microfinance institutions on performance of microenterprises and house hold welfare: a case of Mufindi community bank, Iringa region | |
| dc.type | Thesis |