The role of informal microfinance institutions in saving

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8. Livestock development: heifer breeding, diary farming, sheep and goat keeping, beef ranching and poultry. 9. Natural resources: forestry, fishing and fish farming, game cropping for commercial purposes, wildlife ranches. 10. Tourism: operation of tourist hotels and accommodation, tourist transportation (road, air, ocean and inland water ways), provision of services relating to tourism such as tourist safaris (including licensed hunting, restaurants and photographic services). 2.1.6: INVESTMENT INCENTIVES The government recognizes the importance of effective incentives for mobilizing appropriate local and foreign investments. Accordingly, special incentives are provided to investors whose projects are awarded a certificate of approval by the Tanzania Investment Centre (TIC), in line with the provisions of the National Investment Promotion and Protection) Act, 1990 and operations guidelines issued by the TIC from time to time. Incentives by companies in new enterprises (or in approved rehabilitation and expansion of the existing enterprises) are as follows: 1. Remission of income tax for a period of five years, followed by a reduction in the tax rate by 5% points below the standard rate. 2. A similar remission for five years of withholding tax on Dividends, Royalties, interest payments, followed by the similar reduced rates. 3. Exemption from import duties on all capital equipment, materials, etc. ‘necessary required for an approved enterprise and imported for use solely and exclusively in such approved enterprise”. 4. A similar exemption from sales tax on imports of capital equipment, materials, etc. 5. One stop office, i.e. the TIC for obtaining all the necessary permits and licenses. 6. Simplified processes for registration of companies and other business operations. 102
2.1.7: THE ROLE OF STOCK MARKET IN PROMOTING INVESTMENT IN TANZANIA. The stock market is part of financial markets, which comprises the totality of systems through which financial resources are attracted and guided to investments. A sound stock market is a dominant condition for economic development. This paper explores the philosophy of establishing stock markets and their roles in raising investments funds. Any doubts about the importance of domestic markets in ensuring a balanced economic growth should have been dispelled following the experience of most countries since the 1980s. For African Countries in particular the chronic problems of national and corporate indebtedness have driven home and the futility of combining too much short-term debt with too little long-term equity. The roots of this problem especially for some countries in the sub-region like Tanzania are partly to be found in the activities of multilateral and regional agencies which in the past tended to place great emphasis on development finance institutions and the banking system, by focusing on intermediation, to the near total exclusion of financial markets, on- banking financial institutions and risk capital. Stock markets are now emerging in many African Countries including Tanzania. 2.1.8: The Need for Stock Markets Stock markets are essential because they allow competition between various instruments of a bank-based financial system and non-bank financial intermediaries. In addition they allow risk sharing on an individual basis, without the need for a government guarantee; offer instruments which do not suffer from a cash-flow mismatch; and facilitate the development of other financial markets such as derivative markets. By allowing competition, stock markets are better able to satisfy each investor’s risk, return and horizon preferences. In most of Africa’s bank-based financial system, the choices for lenders and borrowers are very restricted to safe but low and often negative real rates of 103
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THE ROLE OF INFORMAL MICROFINANCE I
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DECRALATION I, Mwakajumilo, Stephen
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DEDICATION To Almighty God, to whom
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ACRONYMS AND ABBREVIATIONS AGOA = A
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TABLE OF CONTENTS Title Page I Abst
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2.2.7 The prospects of SACCOs in Ta
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CHAPTER 4 PRESENTATION AND DATA ANA
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TABLE 18B: Value of loan from SACCO
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To SACCOs, they (SACCOs) are also e
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micro projects, general entrepreneu
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which are viewed as not credit wort
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parts of Tanzania. They are member
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Cooperatives were introduced in Tan
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1.1.3: WHY IS THIS THESIS UNDERTAKE
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Cumulative Number of Number of Year
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Year Number of Members Value of Sha
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Year Percentage of Consumption of l
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• Bureaucratic constraints, lack
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6. To identify gaps/shortfalls (i.e
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economy with respect to the unhealt
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organizations, help members achieve
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The cooperative formula was then co
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savings and credit cooperatives tha
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Cameroon in its English-speaking ar
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Since they have appeared on the sce
Page 51 and 52: Tanzania was the first country in A
Page 53 and 54: Type / Name of institution Microfin
Page 55 and 56: enhancing loan recovery and improvi
Page 57 and 58: embarked on building links with Sac
Page 59 and 60: • Encouraging and supporting, thr
Page 61 and 62: This shows the true nature of a maj
Page 63 and 64: Savings mobilization The potential
Page 65 and 66: It has been argued that the formal
Page 67 and 68: It is suggested that governments, i
Page 69 and 70: Local Counterpart Local MF NGOs wor
Page 71 and 72: Local Counterpart Small Industrial
Page 73 and 74: Local Counterpart Program Amount Go
Page 75 and 76: • PROMOTION AND ROLE MODELS. Help
Page 77 and 78: (iii) The target group being foreig
Page 79 and 80: (iv) Existence of pressure of the M
Page 81 and 82: (c) Government should honor stakeho
Page 83 and 84: 1.1.16: INCOME DISTRIBUTION Policie
Page 85 and 86: TABLE 8: Formal Sector Distribution
Page 87 and 88: percent households decreased from a
Page 89 and 90: Also the significance of this study
Page 91 and 92: loans to their respective members i
Page 93 and 94: • Having adequate and timely secr
Page 95 and 96: LITERATURE REVIEW 2.1.0: INTRODUCTI
Page 97 and 98: It further defines savings and cred
Page 99 and 100: from being influenced by individual
Page 101: Investment Guarantee Agency (MIGA)
Page 105 and 106: isk{Solnik 1974}. As a consequence
Page 107 and 108: • Access for New Firms- The prest
Page 109 and 110: of financial systems. The success o
Page 111 and 112: Mkwizu (1992) points out that Tanza
Page 113 and 114: (1994) conclude that this conservat
Page 115 and 116: areas. However, repayment schedules
Page 117 and 118: plus services (Aghion and Murdoch 2
Page 119 and 120: � Lack of appropriate and adequat
Page 121 and 122: savings of the community. Community
Page 123 and 124: ingenious entrepreneurs behind them
Page 125 and 126: Reforming the national small busine
Page 127 and 128: linkages based on both market and n
Page 129 and 130: combinations: private sector, gover
Page 131 and 132: Tanzania and most of its neighborin
Page 133 and 134: favorable rates and help keep finan
Page 135 and 136: The SACCOs, is a complex organizati
Page 137 and 138: 2.2.10.1: Advantages for the SACCOs
Page 139 and 140: 2.2.10.3 THE COMPARATIVE ANALYSIS B
Page 141 and 142: 2. The importance of savings in the
Page 143 and 144: Commercial Banks are like the other
Page 145 and 146: presence in carrying on the traditi
Page 147 and 148: A summary profile of selected NGOs
Page 149 and 150: (ii) Competitive Financial Environm
Page 151 and 152: � Likewise, these institutions wi
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METHODOLOGY OF THE STUDY CHAPTER TH
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among variables such as the support
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• Checklist response • Rating a
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• What are the roles of instituti
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In each Region, a total of 20 SACCO
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3.1.8: Data Processing The data res
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3.1.12: Limitations • Difficult i
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Those students who are to write a M
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V. Generalizations and interpretati
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The method of collecting Primary an
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characteristics of participants, th
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How? Through experiment approach /g
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which the problem has got to be stu
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4.1.2: Responses to Questionnaire.
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Outreach and Savings Mobilization
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iggest commercial city have more SA
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small farmers are most likely to sa
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15 TPB … 16 TGT … 17 IFAD-Mbeya
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and bank balances which have been o
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However, operating income per total
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The Research Institutions in Tanzan
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microfinance services in both rural
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(xi) Do you inform SACCOs about you
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• Provide modern facilities and i
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validate this observation by asking
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fact that their SACCOs serves all k
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What is more disturbing than the fa
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Year Real Private Disposable income
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Year Real Private Income Received b
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Model R R Squar e Adjusted R Square
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213
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215
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CONCLUSION The performance of micro
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5.14 Please list in the other impor
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Bank and other institutions engagin
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Table 18A: SITUATION FOR THE SACCOs
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Table 19: SITUATION FOR THE AUDITED
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(a) Specific Recommendations. The r
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APPENDIX E: QUESTIONNAIRES USED TO
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5.15 How have you been financing th
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Real Pinco RGD Rate Real GV Inv Dum
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In general, SACCOs in Tanzania have
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Finally, governments in Sub-Saharan
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5.3.11 If the answer to 10.0 is “
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5.3: RECOMMENDATIONS OF THE STUDY (
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REFERENCES: Ally M.Kimario, Marketi
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Working paper number 466, IDS, Univ
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