The effect of credit schemes of poverty alleviation among women entrepreneurs: a case Study of Akiba Commercial Bank and Promotion and Rural Initiatives and Development

The study aimed at examining the effect of credit schemes in alleviating poverty among women entrepreneurs in Tanzania. To achieve this objective a survey was conducted among 100 women respondents, 2 Credit Officers and 2 Branch Managers from ACB and PRIDE (T) in Temeke and Kinondoni districts in Dar es Salaam Region. Both Quantitative and qualitative approaches were employed to measure the significance effect of credit on women poverty and explain the underlying motives for women to Join the credit programs. A questionnaire was administered among the selected respondents and credit scheme officials. Comparison of data from secondary sources, in-depth interviews as well as focus group discussions were used accordingly to compare and confirm emerging issues in respect to this study. The survey data revealed that, women involved in credit programs were able to ach1eve social and economic ends through credit, such as fulfillment of medical expenses of their families, paying school fees for their children, buying some assets like cars, land and valuable households equipment’s. Others were able to expand and or improve their old businesses and some women were able to establish and manage new businesses through credit support. The study was based on group lending model that emphasized on lending to the poor people without collateral requirement. It was found out that, through that model, women were emancipated, empowered and enjoyed peer financial support. It was further observed that, credit schemes strengthened saving behaviors and socialization among members. However, the study found out there were some constraints and challenges such as lack of business training, low levels of education among respondents, high interest rates, peer contribution to defaulters, too much time spent during weekly meetings and some bureaucratic procedures in the credit schemes lending arrangements that negatively affected the growth of women's businesses, resulting in failure to achieve the desired development. In order to rectify shortfalls and ensuring net positive effect of credit schemes in financing women entrepreneurs, the study proposes that, trainings on business skills should be provided, grace period should be determined by the nature of the business flexibility is necessary in some of peer pressure credit transaction and in the whole government should work in partnership with other agencies so as to ensure effectiveness of poverty alleviation in the country