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Problems Affecting the Growth of Microfinance Institutions in Tanzania

Author

Listed:
  • J.Mukama
  • Therese Fish
  • Jako Volschenk

    () (University of Stellenbosch Business School)

Abstract

This paper examines the factors that inhibit growth in the microfinance sector in Tanzania by measuring the perceptions about such issues among Microfinance Institutions (MFIs). The most important include the educational levels of clients, lack of capital to lend to clients and staff related incentives and skills development. These findings indicate phenomena that deserve consideration from legislators. Also prominent is the dual nature of the finance sector, with the conventional banking institutions experiencing factors differently to the Savings and Credit Cooperative Societies (SACCOs), which by their nature have a lower cost structure and have better information about their own clients, but lack sufficient access to loan capital.

Suggested Citation

  • J.Mukama & Therese Fish & Jako Volschenk, 2005. "Problems Affecting the Growth of Microfinance Institutions in Tanzania," The African Finance Journal, Africagrowth Institute, vol. 7(2), pages 42-63.
  • Handle: RePEc:afj:journl:v:7:y:2005:i:2:p:42-63
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    More about this item

    Keywords

    Tanzania; Microfinance; Regulation;

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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