REPORT__Evaluating_the_potential_of_microfinance_for_sanitation_in_Tanzania_May_2013

frequently change employment, which creates a higher risk: “They are very mobile in the
job market. This has introduced a new risk factor in the salary loans segment that most
banks are struggling to manage.”
2. Interest in microfinance for sanitation
MCB is a relatively new bank in Tanzania. Hence it has not provided any water or
sanitation loans. These are considered as a new market segment that new banks would
not tend to start their operations with. These banks may not see water and sanitation as a
key sector to focus on. However, the interviewed officer expressed interest that this is an
area the bank could explore in future. But this would be in a broader context of perhaps
housing financing, which the bank is currently actively considering.
3. Product development experience
As mentioned earlier, the bank is still new hence has not developed a wide range of
products. But to date, the bank appears to have developed successful basic products
including current, savings accounts and business and group loans.
The bank is in the process of developing a product concept to provide housing
microfinance loans.
This will be in response to a fund that the Bank of Tanzania (BoT) will soon announce
(with World Bank funding) to improve the housing situation in Tanzania via the use of
microfinance.
4. Overall assessment of the potential for sanitation microfinance
The bank has an in-house product development team which takes the lead in product
development. The Head of Microfinance whom we interviewed is part of this product
development team. He showed great interest in developing new products, and he noted
“we can explore other products as long as these would benefit our customers”.
The Head of Microfinance is aware of and knows members of the Housing Microfinance
working group in Dar es Salaam. He is a likely contact for sanitation microfinance working
groups and therefore a potential change agent in encouraging sanitation microfinance in
Tanzania. The Bank shows much potential given its religious/social mission and likelihood
of having loyal clients as seen in banks with similar backgrounds e.g. Centenary Bank in
Uganda.
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