The role of informal microfinance institutions in saving

An umbrella organization for microfinance has recently been organized and established with
considerable support from various international donors, the Tanzania Association of Micro
Finance Institutions (TAMFI).
The objectives set out for TAMFI- to serve as a central unifying force for the development and
expansion of a range of institutions providing financial services to the poor and low-income
households, and to be the principal private sector advocacy group for the microfinance
industry- are fairly straightforward, and resemble those for similar network organizations that
have been set up in other countries in Africa, such as the Ghana Microfinance Institutions
Network (GHAMFIN). Having been set up formally and registered only in staffing and
operations, and becomes more active, it will be interesting to observe whether and how the
more numerous institutional providers of microfinance services—the SACCOs and their own
network organization, the Savings and Credit Cooperative Union League of Tanzania
(SCCULT) will become an integral part of TAMFI.
2.2.10.6: STRATEGIES FOR SAVINGS MOBILIZATION AND MANAGEMENT IN TANZANIA.
Strategies to enhance savings mobilization and management must recognize the importance of
the small savers and the need to encourage them. The strategies for savings and management
as they relate to the Tanzanian economy are as follows:
(i) Poverty Reduction Initiatives.
The poverty must be addressed in order to put a larger population in the category of savers.
For poverty reduction initiatives to succeed, the beneficiaries must be empowered and made
to contribute to the wealth of the economy through their involvement in viable business or
trade. There is also the need to streamline the various poverty reduction programmes to
ensure the achievement of the desired objectives. In recognition of the need to empower the
poor and involve them in nation-building, the present Government has made the poverty
reduction strategy the cornerstone of its economic policy.
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