The contribution of Microfinance Institutions on Household Income: A case of Brac project Dar es Salaam.

Msoffe, Lilian Josephat (2023) The contribution of Microfinance Institutions on Household Income: A case of Brac project Dar es Salaam. Masters thesis, The Open University of Tanzania.

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Abstract

The contribution of microfinance institution on household income as the subject of the study, where a sample of 150 microfinance participants were chosen as a sample study, which was carried out in the Dar es Salaam region. Interviews, observations and review of documents were the methods used to collect data. The results demonstrate that 84% of respondents were able to save 10% to 20% of their earnings, demonstrating the beneficial effects of microfinance in raising households’ income. This was attributed to the fact that the majority of loan beneficiaries were able to expand their enterprises as a result of getting loans, which resulted in greater returns and, as a result, improved saving capacity. In order to compare the income levels before and after taking out loans, the researcher went further and evaluated the respondents’ income levels before and after taking loan. According to the results it was depicted that most of the respondent’s income level was low before taking the loan, 68% of the respondents could save below 100,000/= TShs. While after receiving loan more than half of the interviewed respondent’s income was between 100,000/- to 500,000/=Tshs. some of the respondents stated that the loan they received from Brac allowed them to buy items like motorcycles, which made it easier to travel to their business locations given the nature of the Dar es Salaam region, which is often plagued by traffic jams. The study recommends that the loan term be increased to meet the needs of the beneficiaries. So, the period must be increased to two years or more to provide the borrower enough time to pay the installment. This will further lower the payment-installment amount, making it simpler for the customer to pay a modest amount and promoting business growth. Keywords: Microfinance, Microfinance Institutions, Income Poverty, Income.

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