Assessment of udsm guarantee loan schemes : a case study of national microfinance bank loans to staff

There have been misconceptions/differences on the role played by guarantee schemes in credit deliver, or what credit schemes can contribute to the wellbeing of an individual. The main objective of this study was to assess how Guarantee Loan Schemes can improve staff welfare. The study employed both primary and secondary data to address the research questions. In collecting the primary data, the study used both the questionnaires and interview techniques. The study involved 53 respondents of whom 50 were loan beneficiaries, 2 were NMB loan officers, and I office from the office of the CADO. This study has revealed that guarantee schemes played a significant role for enabling staff to improve their welfare. It has revealed that majority (78%) of the respondents have benefited from guarantee loans. Beneficiaries have mentioned several benefits that they have gained from guarantee schemes since its establishment, e.g. they built houses, purchased means of transport, paid school fees, etc. The study has therefore concluded that guarantee loan schemes have improved staff welfares. This study recommends that there is a need for the staff/beneficiaries to be educated on entrepreneurship so that they can develop a culture of borrowing for business purposes. In addition to credit, beneficiaries also need to be conversant with other services such as insurance. Furthermore, there is a need for all involved parties; guarantors, lenders and borrowers to meet and discuss how better they can improve guarantee scheme policies so as to suit beneficiaries' demands, and hence these services extended to more staff.