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The main research objective was to assess the effects of group lending on group
borrower in Tanzania, a case of group borrowers in Ilala district Dar es Salaam. The
specific research objectives were to examine the contribution of group loans on
sustainable access to finance among group borrowers, to assess the contribution of
group loans on sustainable business growth among group members, to determine the
challenges faced by group members when financing their business undertaking
through group loans and to establish the strategies that might be applied to improve
access to finance by borrowers. The study involved 80 respondents. Both primary
and secondary data collection methods were employed. Primary data collection
methods included questionnaires and interview. Findings from the study revealed
that group loan plays a greater role towards ensuring sustainable access to finance
among group borrowers. This was expressed through assurance to repay, training,
higher degree of supervision, frequency of instalment payments and the credibility
for higher repayment. Furthermore, the study found that, group loan plays a greater
role towards ensuring sustainable business growth among group members. This was
evidenced through adequacy of fund, the increased sales and profit volumes, and
relationship between amount of loan and group borrowers’ business
prosperity.Furthermore, the study revealed that there are various challenges faced by
group members when financing their business undertaking through group loans.
These include group formation, loan recovery pressures from banks, short loan
repayment period and high interest rates.Finally, the study revealed that there are
various strategies that might be applied to improve access to finance by borrowers.
These include strategic planning, developing good relationship with banks and
education level. |
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