A Dissertation Submitted in Partial Fulfillment of the Requirements for Award
of the Masters Degree of Business in Administration in Corporate Management
(MBA – CM)of Mzumbe University
This study aimed at assessing the contribution of microfinance institutions to
poverty reduction in Tanzania. Specifically, the study had the aim of assessing thecontribution of microfinance institutions to the social development of entrepreneursto determine the impact of microfinance institutions to poverty reduction and alsofinding out challenges facing entrepreneurs in the credit acquisition from
microfinance institutions. The study was carried out in Kinondoni Municipal, Daes Salaam.
The study employed descriptive statistical approach to describe the findings from
selected case studies, with the aim on describe the data and characteristics abouwhat is being studied. The target population was the Entrepreneurs who acquireloans and other financial services from various financial institutions such asSACCOS, PRIDE and FINCA. These were interviewed by asking them to answeboth closed and open ended questions. The sample comprised a total of 120
entrepreneurs. Convenience sampling technique was employed to selecrespondents, questionnaire was used for data collection. The statistical Package forSocial Sciences (SPSS) was used for data analysis.
The study findings revealed that there is positive contribution of microfinanceinstitutions to the social development, in which there is better access to healtheducation and basic services and greater social respect. The contribution ofeducation level and entrepreneurial skills has positive impact to poverty reductionFrom the finding obtained it has been found that microfinance institutions has apositive impact to poverty reduction in which there is increase in income, betteliving conditions and better access to basic needs. Lastly study found that challengesfacing entrepreneurs are short time for loan repayment, low amount offered byMFIs, expensive collaterals and high interest rates.
It is therefore recommended that government and other stakeholders should work
together to make sure that, time given to repay loans is increased, to increase theamount which is borrowed, the collateral for loans should be that which mostEntrepreneurs can afford and thirdly the interest rates should be lowered.