Micro Finance Institutions (MFIs) Practices and Povery Alleviation in Tanzania

Abstract

Tanzania's Poverty Reduction Strategy (PRS) focuses among other efforts at reducing income poverty, improving human capabilities, survival and social well being and containing extreme vulnerability among the poor. In this context access of households and firms to physical and financial resources is extremely crucial. For the majority of Tanzanians who are poor, without access to formal financial institutions, access to micro finance services is a viable alternative in an attempt to reduce poverty. Micro finance institutions (MFIs) offer the poor, the possibility of managing scarce resources more efficiently and taking advantage of investment opportunities for economic returns. Access to finance services may contribute to increased income generation and thus achievement of higher standards of living at household levels while at enterprise levels it can facilitate the pursuit of income and firms growth. The operations of MFIs need therefore to have greater outreach particulars where the poor are concentrated, i.e. in the rural settings. At the same time services ought to be sustainable in order to have impact on poverty alleviation.


(Af. J. of Finance and Management: 2003 11(2): 65-83)