The role of informal microfinance institutions in saving

CRDB’s microfinance operations are carried out through a specialized, dedicated Microfinance
department, which is funded by DANIDA and supported by it with technical assistance. The
strategic mission for the microfinance department is to identify and develop banking
relationships with a wide range of MFIs at the branch level; most likely the SACCOs will
constitute the single largest type of MFIs that will be covered by the program. With the sub-
wholesaler approach to providing microfinance services CRDB expects to incur an operating
and transaction cost profile comparatively lower than what might encountered in making
loans directly to small individual borrowers.
Akiba Commercial Bank is a relatively new bank which began operations in 1997. Private
investors own 47% of the bank, with 31% owned by foreign investors and 22.6% owned by
public investment institutions such as Tanzania Development Finance Ltd, National Insurance
Corp. and Presidential Pension Fund. Its original mission of specializing in providing financial
services to small and medium-size enterprises met stiff competition, and changed in August
1999 to providing a range of banking and financial services to micro and small businesses on a
commercial basis. Akiba currently has 3 branches- all in Dares-Salaam. Its microfinance loan
offerings include:
Group Microfinance Loans, from Tshs 50,000-100,000
Individual Microfinance Loans, from Tshs 100,000- 5.0 million
Small Business Loans, from Tshs 5.0 million-10.0 million
Loans to SACCOs
Tanzania Postal Bank was created by an Act of Parliament in 1991 to replace Tanganyika Post
Office Savings Bank, and commenced operations in 1992 as a non- bank financial institution
licensed by Bank of Tanzania. TPB’s main objective has been to mobilize local savings and
promote the savings habit among small-scale savers, particularly individuals. It provides savings
deposit services in all post offices throughout the country, through ordinary savings service
passbooks and domicile-quick accounts. TPB is restricted from carrying out new lending, due
to high levels of provisioning for delinquent loans which is similar to that of postal banks in
other countries in Africa. The institutions are able to take advantage of their widespread
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