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Microfinance in terms of personal loan is a veritable tool of mitigating the effects of poverty among vulnerable groups and enhancing the level of income of the beneficiaries. Interest rates could range from 12 to 30%, while the service charges and prepayment penalty being very high. However, Mvomero district primary school teachers have emerged to access personal loans as to boost their lives regardless of these challenges. The general objective of the study was to assess the impact of personal loans to primary school teachers in Mvomero district. Case study research design was utilized in the methodology. A sample size of 120 respondents was involved. The data collected were analysed and processed by SPSS computer software through the utilization of descriptive statistics where; frequencies, percentages and tables were run. The findings from the study indicated that, 82% of respondents affirmed the easy of access to personal loan and 85% applied for loans in order to improve their well being by raising income through buying and selling food crops available in their areas as among the reasons to apply for loans. However, 80% of the respondents utilized loans to buy/build modern houses and agricultural land and 83% utilized loans to buy home accessories. Yet, 80% of the respondents reported the presence of psychological discomfort as some teachers could not receive payments at the end of the month, 82% pointed out the dishonest behaviour as teachers accessed personal loans from more than one financial institution rendering them not fulfilling their responsibilities and 85% reported the lack of knowledge to utilize well the loan as planned which resulted into miseries in the time of repayment. The improvement of primary school teachers’ well being in Mvomero district council necessitated them to apply for loans from financial institutions in order to supplement what they get at the end of the month which is little. The research adds to the argument for enhancing primary school teachers’ income and ensuring that interest rates charged are minimized in order to improve their well being. |
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