Assessment of the impact of the microfinance institutions services in empowering mses owners in Tanzania: a case study of dar es salaam region

MFIs are institutions involved in the provision of financial services such as loans, savings and insurance to poor people living in both urban and rural areas who are unable to obtain such services from formal financial sector. These people generally engage themselves in small business groups formed for small business activities such as carpentry, grocery, animal husbandry and tailoring. This study is based on the assumption that if MSEs owners are given access to financial services their status will change in a more positive manner generating more income to MSEs’ owners and creating additional opportunities. Therefore, the purpose of this study was to evaluate the impacts of financial services provided by MFIs to the MSEs owners in terms of increased income and employment. Furthermore, the study aimed to determine the adequacy of credit given to MSEs and the impacts of training facilities.To achieve the research objectives, interviews, discussions and questionnaires were conducted to respondents. This study involved 140 copies of a questionnaire which were distributed to different MSEs owners as respondents, out of these only 108 copies were returned. Data analysis was conducted by using descriptive statistics analysis in SPSS showing frequencies of each objective tested. Hypothesis testing was conducted by using Univariate Analysis of Variance and one-Sample Kolmogorov-Smirnov Test. Findings show that the income of the majority of MSEs owners has increased after they have joined MFIs and they enjoy the services being offered. On employment, the finding show that there was an increase of employment opportunities as the number of employees increased from between 1-4 employees up to between 5-49 employees per MSE. Also, with regard to capital formation, the study finding shows that there was an increase of capital. Furthermore many of the respondents agreed to have been receiving training from their MFIs and they have benefited much from the programs being offered. The study revealed that MSEs owners are satisfied with credit being offered by MFIs as it enabled them to run their business at required level of operations.In summary, the study reveals that MFIs services have empowered MSEs owner as many of the mentioned services when tested show positive results according to views of respondents. Also, the study suggests further studies should be conducted on relevance of MFIs services to MSEs owners in Tanzania looking on performance of MFIs services