The relationship between the use of micro-credit and loan performance of MFI's clients in Tanzania: the case of Victoria Finance and FINCA tanzania
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Date
2015
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Publisher
University of Dar es Salaam
Abstract
This study aimed at understanding the relationship between the use of micro-credit and loan performance of MFIs’ Clients in Tanzania and its influence on business growth of micro-finance’s clients. Specifically, the study aimed at (i) determining how microfinance institution’s client's use their loans (ii) establish the extent to which the injection of loan to business activities contribute to business growth of microfinance clients and (iii) It also sought to explore the performance of businesses by micro-finance’s clients who divert loans applied for business to non-business activities. It is hypothesized that, business growth is independent from micro-finance credits and it is independent from divergence of MFIs credits to non-business activities.
The study employed an exploratory and correlation research design in which data were collected through structured questionnaire and were quantitatively analyzed with the aid of SPSS programme.
Generally, the findings revealed that MFIs* clients used the borrowed loans variously. While others invested the completely borrowed loan on the intended business, others diverted the loan to non-business activities. On the other hand, it was found out that, largely, the borrowed loans helped to boost business growth for entrepreneurs.
The study recommends that loan beneficiaries should be trained before investing their loans. In addition, the management in micro-finance institutions should make proper screening of loan beneficiaries and make follow-ups to know whether the loans are used on the intended businesses or diverted to non-business activities that have impact on loan repayment
Description
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark ()
Keywords
micro-credit, MFI's, FINCA
Citation
Valery, R. (2015) The relationship between the use of micro-credit and loan performance of MFI's clients in Tanzania: the case of Victoria Finance and FINCA tanzania. Master dissertation, University of Dar es Salaam. Dar es Salaam.