A Dissertation Submitted in Partial Fulfillment of the Requirements for Award of
the Degree of Master of Science in Accounting and Finance (MSc-A&F) of
Mzumbe University
The study on the impact of microfinance industry on poverty reduction was conducted at
FINCA, Dar es Salaam. The objectives of the study were; to establish indicators of
living standards in Tanzania; to determine the measures of microfinance growth in
Tanzania; to establish other factors influencing the living standard in Tanzania and to
determine the impact of microfinance industrial average growth on the living standard in
Tanzania
A case study design was used whereas a sample of 63 respondnets was involved. In
collecting primary data the study used questionnaire and interview. Secondary data were
collected through documentary analysis. Data was analyzed by using SPSS, tables and
figures were used to present data.
The study found majority of the respondents (64.2%) identified level of income as a
major indicator of living standard. Also, the study found the large number of the
respondents (39.7%) identified that technology improvement facilitates microfinance
growth. Moreover, the study found majority of the respondents (55.2%) identified that
there is a need to improve service environment.
The study concluded that microfinance institution play significance role in poverty
reduction and improving living standard through; job creation and saving. Poor people
can and do save if they are given appropriate opportunities and incentives. Savings can
help them accumulate assets which could be used for business and household purposes
while also earning interest on savings. Also, the study concluded that there are a number
of challenges facing MFIs. These include; inadequate sources of funding for MFIs,
competition, poor management skills and lack of governance corporation. The study
recommended that in order to create a good management staff MFIs need to strategically
deal with challenges of business e.g. defining job roles, hiring and training, monitoring
employee performance, inculcating an appropriate culture to motivate staff.