1 / 13

Introduction

Introduction. Tanzania economy depends on agriculture predominantly small holder type accounts for 43% of GDP directly or indirectly provides jobs and livelihoods for 90% of total workforce. Poverty in Tanzania. High magnitude, amongst the world’s 10 poorest countries.

goldy
Download Presentation

Introduction

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Introduction • Tanzania economy depends on agriculture • predominantly small holder type • accounts for 43% of GDP • directly or indirectly provides jobs and livelihoods for 90% of total workforce

  2. Poverty in Tanzania • High magnitude, amongst the world’s 10 poorest countries. • Per capita GDP USD267 • 51% of population below poverty line • Rural households comprise majority of the poor (92%)

  3. Intervention Strategies • Facilitation of increased investment in micro, small and medium enterprises • Gov. policies: 5 year National Strategy for Growth and Reduction of Poverty • Financial sector reforms of the 1990s • National Microfinance Bank

  4. Microfinance in Poverty Reduction in Tanzania • Overwhelming evidence; the poor are able to save and repay loans • Deliberate Government effort: National Microfinance Policy • NGOs contribution: development of lending technologies to the poor.

  5. National Microfinance Policy • Necessity to achieve widespread access to Microfinance services • operations on commercial principles • banks, non-bank financial institutions, rural community banks, cooperative banks, SACCOS, NGOs (MFIs). • Competition; efficiency and quality • no subsidies, exceptions for organisations pushing the frontiers to most remote locations, poorest clients.

  6. Integration of Services at the National Microfinance Bank • Established to provide financial services to the majority of the poor in Tanzania • Government has preserved the vision of the initial vision of the bank. • Widest branch network provides a platform for outreach. • Specifically designed products and services • microenterprise loans • low income wage earners loans • small holder farmers loans • institutional loans to MFIs • savings deposits for low income earners.

  7. CONCLUSION and CHALLENGES • It seems less certain that large-scale Microfinance can be achieved simply by integrating financial services for the poor into the over all financial system • Implementation of the Microfinance Companies and Microcredit Regulations 2005

  8. OTHER CHALLENGES • Rural environment, low population density • poor physical and communication infrastructure • seasonality of agricultural production and susceptibility to natural disasters • Rural poor generally lack assets which can be collateralised • High cost of entry to be full service bank

  9. OTHE CHALLENGES CONT’D • Institutional Obstacles • lack of expertise in rural lending • negative attitude toward rural lending; high risk, not profitable. • Lack of entrepreneurial skills, training • Insurance services restricted to urban areas • What incentives will motivate banks to extend financial services to the districts and improve rural outreach?

  10. NEXT STEPS ... • Mainstream financial services, PRIDE TZ • Improving rural access • maintaining supportive regime • Effective credit information • emphasize rural savings • Innovative non-collateral based instruments • lowering of investment risk through efficient insurance services

  11. ... THANK YOU

More Related