Browsing by Author "Mashauri, Specioza Mkwaya"

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    Micro-Finance services to MSEs: Analysis of the performance of selected MFIs in Tanzania
    (University of Dar es Salaam, 2004) Mashauri, Specioza Mkwaya
    The micro-finance Institutions (MFIs) have made a considerable impact on jump-starting entrepreneurial projects for the MSEs; however, a large demand for credit can only be fully met, if they strive for financial soundness over and above their social mission of assisting those who cannot access to credit from the formal financial institutions (MFIs) The methodology adopted the study is the random sampling technique, and with some element of This work recognizes that the commonly individual and solidarity or group-based methodologies, a sub-wholesaler-based micro-finance institution approach, and other practices such as repayment enforcement, savings and lending conditions (with the emphasis to use collateral substitutes e.g. peer and reference guarantees and repayment incentives) have influenced remarkably MFIs cost reduction of operations, limited the rate of defaulters and thus increased the repayment rates. These models are underscored in that the selected borrowers are entrusted and trustworthy such that their repayment rates are remarkable. With exception of the government-funded scheme (S DO) and PRIDE Tanzania, these MFIs are operating in few regions. The implications of the clientele outreach are that the MFIs ' are centered in the urban areas due to their conducive working environments such as good infrastructure and communications systems; the type of businesses that yield quick returns; the proximity of the borrowers that support efficient coordination and lower operating costs, etc. The rural populations are almost not covered due to the scattered settlements and poor transportation and communication facilities, resulting into high operating costs and credit risk associated with the main economic activity rain-fed agriculture. Other failures are noted as being total continued dependence and reliance of some of (MFIs) on donor support for loan capital and technical assistance which are a major problem on their operational outreach and sustainability. The question remains how many of these MFIs will survive as financially self-sufficient institutions as donor funding and technical support become less readily available? The study also highlights that the MFIs such as the SACCOs do not have adequate technical staff and resources to monitor activities and have weaknesses in operating and administrative management, especially in the area of accounting and internal control systems. The use of IT was found essential in facilitating accountability for funds as it can easily be used in monitoring the procedures involved in the transaction processes, and thus prevents funds misappropriation. IT is also appropriate with the nature and features of small transactions that is quick, and often short-term, and therefore matches with the short-term credit transaction conditions and allows financial reporting to be transparent and facilitate the performance improvements including costs reduction, quality service and speed.