The role of credit schemes for women empowerment and poverty alleviation in Tanzania: the case of Ilala municipality, Dar es Salaam

This study was conducted for the purpose of examining the role of credit schemes in empowering women credit borrowers and poverty alleviation in Tanzania, particularly in Ilala Municipality, Dar es Salaam. The study is based on the social capital theory, a sociological concept that has been applied to a variety of issues including issues of women access to available resources. The study had five specific objectives and they included factors attracting women credit borrowers to join in credit service in Ilala Municipality, policy and regulatory framework that affect the access of women credit borrowers to get loans, conditions used by micro-credit institutions on financing women credit borrowers, effects of credit in empowering women borrowers and reducing poverty and challenges/problems women face in acquiring credit from credit schemes and the way forward to overcomes such problems/challenges. A sample of 67 respondents from three credit institutions namely PRIDE, AKIBA COMMERCIAL BANK and VIBINDO SACCOS was selected using random sampling while credit institutions were selected using purposive sampling technique. The primary data were collected through questionnaires, conversation, observation, and focus group discussion, and secondary data were collected through published academic documents, private research reports, websites, and text books. From this study, it was found that credit schemes are not as helpful as anticipated as only few women got empowered and improved their living conditions. It was further found that women credit borrowers faced several obstacles such as unfriendly lending system, higher interest rates, lack of collaterals, insufficient entrepreneurial skills, and short grace periods. It is recommended that credit institutions should reduce interest rates, and improve training system, prolong grace periods. Women borrowers should join credit services when they have profitable business so as to reduce the burden of finding repayment from other sources, and the government should prepare and implement sound policies which will control credit issuing and repayment.