A Research Report Submitted to Dar es Salaam Campus College in Fulfillment
of the Requirements for the Award of Masters Degree in Business
Administration in Corporate Management (MBA-CM) of Mzumbe University
This study has assessed the factors that affecting the Repayment Performance of
Microcredit in Dar es Salaam Tanzania. Loan repayment has been a serious problem
for most small holder credit programmes. Problems of loan recovery to most microcredit
programmes are attributed to several factors including natural calamities. An
observational study was carried out in one MFI in the Dar es Salaam city namely the
Tujijenge Tanzania Limited located in Kijitonyama - Makumbusho ward.
The general objective was to analyse factors affecting the repayment performance of
Microfinance industry in Dar es Salaam Tanzania. Data were collected using
informal and formal interviews where structured questionnaires were administered to
100 randomly selected respondents. Data were analyzed by using simple excel table,
figures and a regression analysis was done to analyze factors affecting the repayment
performance in Tanzania.
The study findings show that 68.9% of the factors affecting loan repayment related to
the level of household annual income, education level, household labor size,
household assets and amount of loan obtained. Also findings shows that most of the
borrowers are female while 64 of the respondents state that interest rate is friendly
for charging at 4% per month which translate to 48 per annum
The conclusion is that the study discovered that positive factors affecting loan
repayment performance are amount of loan obtained by client, composition of
household, labor size, education level and household annual income. Meanwhile the
value of household assets negatively influences repayment of loan.
The study recommends that: (a) interest rate should be lowered (b) business
education should be provided to both loan officers and clients and (c) the government
in collaboration with the Bank of Tanzania should review the financial policy giving
opportunity to micro investors to access loans.