Analysis of the role of microfinance institutions towards poverty alleviation in Tanzania: a case of PRIDE and FINCA in Dar es Salaam

The main objective of this study was to analyze the role of MFIs towards poverty alleviation. MFIs in Tanzania have significant contribution on business growth and increase in incomes. Data were collected using primary data and secondary data. The primary data were collected by the researcher from the MFI employees and clients while the secondary data were collected from books, journals and previous researches. Analysis of the data was done through chi square test and goodness of fit test and testing of hypothesis enabled to answer research questions. The conclusions made are on whether there is inclusion of poorest people. The other analyses were on the relationship between MFIs loans on income (sales) and growth of business enterprises. First, it was concluded that the poorest people are being excluded in MFIs services. The analysis show that the people with no capital are not considered in the loans that are provided as they have no capital to establish business. It was further concluded that the amount of loans offered to MFIs clients have positive impact on their business incomes and the growth of business enterprises. The analysis and test statistic had shown that the MFIs loans have enabled firms to increase sales (income) and the growth of business enterprises. The study has proposed some policy changes to the government such as provision of guarantee to the poorest so as to make them bankable. The government should also spearhead the establishment of centralized database for all clients that will show the status of loans they have taken from different banks. The MFIs have been urged to change their policies on interest rates so as to lower them to establish more branches. The study has also found out areas for further research in the last sub-section of chapter five which include study on the role of MFIs towards poverty alleviation in rural areas, study on repayment practices of MFIs clients in rural areas and study of impacts of MFIs meetings on the businesses of their clients in terms of time and money spent on travellings to and from MFIs meeting centres.