Challenges facing micro finance institutions in Tanzania case study saccos in Dodoma region
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Date
2007
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Publisher
Sokoine University of Agriculture
Abstract
The study sets out to examine the main challenges and lending systems used by SACCOS, the growth and performances of SACCOS in Dodoma region The study was conducted through extensive secondary research, interviews withSACCOS’ managements and clients in the period'between June and December 2006 in Dodoma region. Structured questionnaires were used to gather primary data while focused group discussions were used to extract diverge opinions from board members about challenges. The study reveals that, SACCOS face many challenges that hamper their growth and performance. These challenges include; competition, poor loan repayment and recovery, lack of cooperative skills for management, embezzlement of funds, robberies, weak capital bases for most SACCOS, poor remuneration of employees and shortage of cooperative officers. SACCOS in the region use both individual and group lending approaches. Lending is based on the amount of savings a member has. Basing on study findings it can be concluded that, the available challenges have an impact on the performance and growth of SACCOS. This was revealed in increasing loan delinquency in which 21% and 18% of the total loans disbursed were in arrears for Majengo and Kibaigwa SACCOS respectively and 28% of respondents mentioned existence of lack of cooperative skills among board members. The study recommends that, government, donors and other stakeholders should work together in promoting policies and programmes that support the establishment and growth of SACCOS so as to save the majority poor ordinary Tanzanians. Further more the study recommend on the improvement in SACCOS lending methodologies, by-laws.
educating system lor members and managements. To minimize Ioan delinquency by assuring collateral availability for each loan and establishment of a specialised Act which allows SACCCOS to operate as business entity
Description
Dissertation
Keywords
SACCOS’ managements, Cooperative skills, SACCOS challenges, Lending systems challenges, Poor loan repayment, Dodoma Region