An assessment of microcredit performance on poverty reduction in Tanzania: the case of posta na simu SACCOS and PRIDE -Tanzania

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University of Dar es Salaam
The overall objective of this study was to assess the impact of micro credit on poverty reduction in Tanzania. The study investigated two Microfinance Institutions in Tanzania. PRIDE and Posta na Simu SACCOS where 100 customers from both PRIDE and Posta na Simu SACCOS were interviewed. At the same time 10 respondents credit providers were interviewed. To tackle the research objective the study employed four research propositions: poor people access credit easily from microcredit institutions: conditions and procedures set favours poor people; mmicro-credit finance contributed to an increase in income to credit receivers and micro-credit finance contributed to an increase in employment opportunities Findings show that Microfinance Institutions lack policy and regulatory environment, have insufficient access to information and weak human and institutional capacity. Therefore, as a result of these impediments access to microcredit remains limited to poor population in Tanzania. It was observed that conditions and procedures set do not favour the poor and low-income earner clients. Therefore, the proposition that poor people do access credit easily was not supported by the results from this study. The results from the study indicate that both income and employment opportunities increased significantly after started borrowing from microfinance institutions. Therefore, the results from this study indicate that microcredit institutions have created more employment opportunities. It was recommended that Tanzania needs to intensify its efforts in encouraging entrepreneurship formulation through credit strategy. In order to improve credit growth through Microfinance Institutions, Tanzania should initiate market opportunities for product/services through promoting business activities, moreover efforts are needed to simplify the procedures to star and run business through credit facilities. Creation of awareness is another area needs to be put into consideration, because most people are not aware of the availability of credit facilities.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HG1641.T34S86)
Loans, Bank credit, Credit Unions
Sungusia, V.R (2007) An assessment of microcredit performance on poverty reduction in Tanzania: the case of posta na simu SACCOS and PRIDE -Tanzania.Master dissertation, University of Dar es Salaam, Dar es Salaam.