Full Text Article. Available at: https://saepub.com/get-paper.php?table=ARJBM&id=100This study was conducted following the research conducted by Kasoga (2014) in Tanzania which proved empirically that the joint liability lending model first used in Bangladesh was not replicable in other ethnic groups in Tanzania, which wereChaga from Kilimanjaro Region, the Zaramo from Coast Region, the Kinga from Njombe Region and the Gogo from Dodoma. She found that the joint borrowers perceived joint liability lending model as inappropriate lending model because of high perceived risk associated with borrowing incurring joint liability. Therefore, this paper improves a joint liability lending model lending to take into consideration weakness of the high perceived risk, associated with borrowing incurring joint liability. A study was conducted from four ethnic groups namely, Gogo, Zaramo, Chagga and Kinga borrowed from PRIDE (T) and FINCA (T). Questionnaires were used to collect information. The multiple linear regressions were used to perform the analysis. The findings have shown that the modified joint liability lending model reduces the perceived risk associated with borrowing incurring joint liability and influences positively borrowing as a group. It is recommended that microfinance institutions should work towards modifying their lending models by taking into consideration differences in cultural values which could enhance borrowing and achieve the goal of poverty alleviation.