Contribution of Microfinance Institutions to Poverty Alleviation in Tanzania: A Case Study of FINCA Micro Finance in Dodoma Municipality.

Mwita, Daniel Elias (2021) Contribution of Microfinance Institutions to Poverty Alleviation in Tanzania: A Case Study of FINCA Micro Finance in Dodoma Municipality. Masters thesis, The Open University of Tanzania.

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Abstract

This study aimed mainly at assessing the contributions of microfinance institutions (MFIs) in Tanzania and determining their effectiveness in poverty reduction. The problem underlying this study was that the MFI contribution to small and medium-sized businesses in Tanzania was not adequate. In the data gathering and analysis, the study employed a mixed method approach. It took place in the town of Dodoma. In order to evaluate its impact in its many operating areas, the study focused on 60 participants who replied to every question and one MFI assessed. After the information gathered from both microfinance institution and their customers, it was found that MFIs have positively altered the lives of poor people. Customers of MFIs have raised revenue, invested capital and thereby expanded their operations. It was further recognized, despite these successes, that some constraints, such as the reimbursement grace period, loan deposit and MFIs, restrict the availability to MFI services for poor people. It was proposed that MFIs should not be able to give loans to consumers needy and collateral should not be a barrier, based on the results of this study. In order to facilitate loan provision for aboriginal entertainment companies and individuals who have no guarantees to access financial resources, MFIs were further recommended, including special tax incentives, business and entrepreneurial qualities and special policies that will lead to increased incomes, employment, poverty reduction and development. Keywords: Microfinance Institution, Micro Insurance and Micro Saving

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