Effectiveness of pride Tanzania in providing Financial services to poor rural households in Unguja, north region, Tanzania
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Mzumbe University
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A Dissertation Submitted in Partial Fulfillment of the Requirements
for Award of the Master of Science in Accounting and Finance
(Msc.A&F) of Mzumbe University
This study is about the effectiveness of microfinance services to poor rural households inUnguja, North Region, Tanzania. The objective was to explore out the perception of the rural households towards the microfinance sector in poverty alleviation or reduction. It also aims at identifying or examining the challenges facing the microfinance sector in Tanzania, identify the major sources of finance that rural households have access and assessing the favorability of loan terms and conditions of MFIs to poor rural households. The research design was case study research design which employed both quantitative and qualitative research approaches. The study obtained data and information through questionnaires, focus group discussion, observation and documentary reviews whereby both quantitative and qualitative data analysis’ techniques were used to analyze the data. The stratified random sampling technique was used to select respondents made up of the general public in different villages of the study area simple random sampling was used to select microfinance stakeholders such politicians, leaders, MFIs staffs and field experts, the number of respondents selected was 350 for rural households 50 for other stakeholders. The finding reveals that most of the rural households are not accessible to these services due to limited number of Microfinance Institutions (MFIs) operating in rural regions, unfriendly loan requirements to the rural people including high interest rate and high valuable securities and poor regulatory and supervisory framework of MFIs.Further finding reveals that most of the rural households are not aware with role of microfinance services, variety of financial and related products and services, also finding reveals that most of the rural households especially who are illiterate use the informal sources of loans whereby the large proportion of these loans are spent in consumption, social expenses and entertainment/festivals rather than investment. Based on the should adopt the group lending approach used by some MFIs from
This study is about the effectiveness of microfinance services to poor rural households inUnguja, North Region, Tanzania. The objective was to explore out the perception of the rural households towards the microfinance sector in poverty alleviation or reduction. It also aims at identifying or examining the challenges facing the microfinance sector in Tanzania, identify the major sources of finance that rural households have access and assessing the favorability of loan terms and conditions of MFIs to poor rural households. The research design was case study research design which employed both quantitative and qualitative research approaches. The study obtained data and information through questionnaires, focus group discussion, observation and documentary reviews whereby both quantitative and qualitative data analysis’ techniques were used to analyze the data. The stratified random sampling technique was used to select respondents made up of the general public in different villages of the study area simple random sampling was used to select microfinance stakeholders such politicians, leaders, MFIs staffs and field experts, the number of respondents selected was 350 for rural households 50 for other stakeholders. The finding reveals that most of the rural households are not accessible to these services due to limited number of Microfinance Institutions (MFIs) operating in rural regions, unfriendly loan requirements to the rural people including high interest rate and high valuable securities and poor regulatory and supervisory framework of MFIs.Further finding reveals that most of the rural households are not aware with role of microfinance services, variety of financial and related products and services, also finding reveals that most of the rural households especially who are illiterate use the informal sources of loans whereby the large proportion of these loans are spent in consumption, social expenses and entertainment/festivals rather than investment. Based on the should adopt the group lending approach used by some MFIs from
Keywords
providing Financial services, poor rural households