The role of informal microfinance institutions in saving

oth governance and economic activities, which could generate incomes for the vast majority,
and thus enhance savings and investment. This would accelerate the pace of economic
development.
6. The importance of putting institutional framework in place to provide avenues for savings
and investment must also be recognized. While formal institutions have worked efficiently in
the developed economics, the outcomes, in the developing countries have been less than
satisfactory. The financial dualism that characterize most developing economies and the need
to put the informal sector in proper focus pose serious challenges for savings mobilization in
these economies. Cross-country experiences in Africa, Asia and Latin America have shown that
savings can be harnessed from the poor given the right institutional arrangements and efforts
at reaching the population with innovative products meet their needs.
2.2.10.5: INSTITUTIONAL PROVIDERS OF MICROFINANCE SERVICES.
The principal providers of financial services to the poor and low-income households in the
rural and urban areas of Tanzania consist of licensed commercial banks, regional and rural unit
banks; savings and credit cooperative societies; and several NGOs whose micro-credit delivery
operations are funded and supported with technical assistance by international donors.
Regulated and Supervised Institutions providers.
Tanzania has (17) commercial banks, 10 non- financial institutions, one regional bank and 2
rural unit banks which are subject to licensing, regulation and supervision by the Bank of
Tanzania under the provisions of the Bank of Tanzania Act (1995), Banking and Financial
Institutions Act (1991), Foreign Exchange Act (1992). The licensed and supervised institutions
are also subject to the regulatory guidelines issued by Bank of Tanzania such as the Banking
and Financial Institutions Regulations 1997), Bureau de Change Regulations (1996), Foreign
Exchange Regulation (1996), and various guidelines specifying mandatory prudential standards
to be complied with regarding management of risk assets, capital adequacy and concentration
of credit and exposure limits.
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