The role of informal microfinance institutions in saving

make possible to provide a safe place for members’ deposits and encourage savings in
the environment and limit fraud, embezzlement or misrepresentations by the adoption
of rules of ethics, sanctions against any individual who imperils intentionally or
otherwise the equilibrium of the cooperative, as well as by protecting the name, if not
the logo, of the cooperatives and their network.
• Set high management, tracking, monitoring and financial health (equity/loan
ratios, loans/savings ratios etc.)Standards to provide safety and saving for the members
• Provide supervision that encourages in house control and a greater credibility for the
network.
• Ensure the democratic nature (one member, one vote) and map out relations
between elected leaders and the cooperatives.
• Providing protection for the depositor’s savings. Certain African countries have a
specific law governing the activities of SACCOs. In Tanzania, the following laws
are appropriate in the governance of SACCOs
� Cooperative societies Act of 2003 and Rules
� Banking and financial institutions Act of 1991
� National Microfinance policy of 2000
� Bank of Tanzania Microfinance Regulations.
Also the government should take a lead in facilitating dialogue with cooperatives. The
government to support education training and audit services, to develop infrastructures such as
roads to mobilize and encourage population to join cooperatives indifferent activities, to
provide the revolving funds where cooperatives are well established, to assist cooperatives to
access regional markets for members to increase income and the government to provide tax
and other incentives in areas which are not attractive to other private sector players.
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