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The study intended to assess the contribution of Microfinance institutions in development of small enterprises in Tanzania, in the context of limited financial services in both rural and urban areas in the greater part of Tanzania, the study attempt to assess the role of Microfinance institutions (MFI) in facilitating micro enterprise development at Ilala Municipality in Dar es salaam region in order to increase prospects for economic and social development.
The general objective was to explore the contribution of Microfinance institutions to development of small enterprises at Ilala in Dar es Salaam. The study was carried out in Dar es Salaam region as it was easier to obtain information from three different Microfinance institutions and some government Officers. Case study research design was adopted. Interview, questionnaires and observation data collection methods were used to collect data. A total number of sixty (60) respondents were given the questionnaires and interviewed.
The findings revealed that microfinance institutions are the options and self-confidence of small businesses by contributing to their expansion and diversification of their businesses. They also help small businesses to decrease risks, increase profit, store their excess liquidity, obtain returns on their savings, and to conduct their businesses with dignity. The standard of living also improves in terms of education, housing, and health. In addition, the economic activities often create jobs for others; among those who gain employment in this way are some of the extreme poor people. They impact by mobilizing savings for investment, facilitate and encourage inflows of foreign capital and optimize the allocation of capital between competing uses. Generally, there is a need to create favorable environment for attracting more establishments of Micro Finance Institutions for sustainable economic development in the poor communities. |
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