The role of informal microfinance institutions in saving

plus services (Aghion and Murdoch 2005). Despite the fact that literature suggests that
microfinance contributes towards alleviating poverty, there is a wide literature in the area
which argues that microfinance does not reach the poorest of the poor (See Woller, 2002;
Montgomery and Weiss, 2005 and Weiss, 2005; Hashemi and Rosenberg, 2006; Fraser and
Kazi, 2004.
The study will be different from the surveyed literature since it will examine the structure of
investments of mobilized savings in financial and non-financial form of informal financial
institutions with references to savings and credit cooperatives societies (SACCOs) in Tanzania
since 1961s.
2.2.3: The role of SACCOs in the economy:
� Identifying gaps in the poverty reduction strategic programmes where SACCOs plays as
a major meaningful and beneficial to the stakeholders.
� SACCOs help in the capacity building among them in advocacy participation,
improving literacy, information sharing etc.
� SACCOs help learning from best practices and up-scaling.
� For the members/society involve in SACCOs are responsible in making investments
attracted.
� Making or help in critical analysis of problems and identify the stockholders to
involve and helps in strengthening policy advocacy role.
2.2.4: Significance of the SACCOs in Tanzania’s Economy
The SACCOs operating in Tanzania are shielded or immune from the typical problems and
constraints of SACCOs in other developed countries. Some countries and other International
financial agencies assist SACCOs because of the crucial inheriting role they play in the
economic growth and development. The assistance is usually in the form of facilities and
supportive services commercial finance venture capital, information training and retraining
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