The role of informal microfinance institutions in saving

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It also suggested that the SACCOs should employ trained field staff who could monitor business and building loans, and could offer business and building advice. 17% of respondents think that fixed deposit accounts are the one most important new service that SACCOs should provide. Finally, respondents were asked whether they would be interested in attending training sessions in managing share and deposit accounts; managing financial investments like fixed term accounts, retirement accounts or other special purpose savings accounts; and business management. An overwhelming majority of respondents (95 to 97 percent) said that they would like to attend these training sessions. While it is not likely that all SACCO’s members would actually attend such sessions, it is certainly clear that many members would find this sort of financial advice useful. The challenge for SACCOs is to come up with a variety of communication and teaching tools which can effectively communicate this information to members. Possibilities include instructional pamphlets and video tapes, one-on one financial counseling, and small group training sessions. 4.1.15: Summary of Research Findings and Recommendations The purpose of this report is to provide information which can be used by SACCO’s membership, staff, board and committee members, by Tanzania Federation of Cooperatives and SCCULT, to further improve SACCO’s ability to provide financial services which complete favorably with other financial institutions. 4.1.16: Saving Services All SACCO’s members are required to hold share accounts, and most members also have demand deposit accounts, it should be noted, however, that half of all respondents also have savings accounts in other financial institutions including banks and building societies. 204
What is more disturbing than the fact that SACCOs members hold savings with other financial institutions is the fact that almost half of the respondents have their largest savings account with a financial institution other than their SACCOs. When those who keep their largest savings at a bank were asked why they do so, almost half reported that it is because they have a tradition of banking with this institution, The good news for SACCOs is that very few respondents cited high rates of interest, safety, or the bank’s reputation as a reason for keeping their largest savings account with a bank. This suggests that SACCOs are competing favorably with banks except in the area of ‘’tradition”, a factor which is outside SACCOs control. With time, and a concerted publicity effort, it is likely that SACCOs could begin to draw member’s savings away from banks, provided that SACCOs continue to offer competitive interest rates on savings. What is also clear, however, is that SACCOs, are not competing favorably with building societies. Since 2008 there has been an unambiguous increase in the proportion of Sacco’s respondents with savings in building societies. When asked why they keep their largest savings account with a building society, 44% of the 2008 respondents reported that they do because building societies offer the highest rate of interest on savings. Another 15% of the 2008 respondents do so in order to qualify for a loan from the building society, suggesting that the ability of building societies to offer large long term loans (e.g. house loans) is drawing savings away from SACCOs and into building societies. It is therefore recommended that SACCOs augment their ability to mobilize savings from current members by raising interest rates on savings to levels that are competitive with building society interest rates, and begin to offer large long term loans that are sufficient to purchase and build houses. 4.1.17: Lending Services Respondents who have taken out loans were asked whether they had borrowed the money from their SACCOs, or from other financial institution. Survey results clearly demonstrated that the proportion of borrowing members who take out loans from their SACCOs has increased since 2008. These results indicate that SACCOs have improved their lending capacity. 205
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THE ROLE OF INFORMAL MICROFINANCE I
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DECRALATION I, Mwakajumilo, Stephen
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DEDICATION To Almighty God, to whom
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ACRONYMS AND ABBREVIATIONS AGOA = A
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TABLE OF CONTENTS Title Page I Abst
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2.2.7 The prospects of SACCOs in Ta
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CHAPTER 4 PRESENTATION AND DATA ANA
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TABLE 18B: Value of loan from SACCO
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To SACCOs, they (SACCOs) are also e
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micro projects, general entrepreneu
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which are viewed as not credit wort
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parts of Tanzania. They are member
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Cooperatives were introduced in Tan
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1.1.3: WHY IS THIS THESIS UNDERTAKE
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Cumulative Number of Number of Year
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Year Number of Members Value of Sha
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Year Percentage of Consumption of l
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• Bureaucratic constraints, lack
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6. To identify gaps/shortfalls (i.e
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economy with respect to the unhealt
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organizations, help members achieve
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The cooperative formula was then co
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savings and credit cooperatives tha
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Cameroon in its English-speaking ar
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Since they have appeared on the sce
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Tanzania was the first country in A
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Type / Name of institution Microfin
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enhancing loan recovery and improvi
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embarked on building links with Sac
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• Encouraging and supporting, thr
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This shows the true nature of a maj
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Savings mobilization The potential
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It has been argued that the formal
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It is suggested that governments, i
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Local Counterpart Local MF NGOs wor
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Local Counterpart Small Industrial
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Local Counterpart Program Amount Go
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• PROMOTION AND ROLE MODELS. Help
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(iii) The target group being foreig
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(iv) Existence of pressure of the M
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(c) Government should honor stakeho
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1.1.16: INCOME DISTRIBUTION Policie
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TABLE 8: Formal Sector Distribution
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percent households decreased from a
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Also the significance of this study
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loans to their respective members i
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• Having adequate and timely secr
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LITERATURE REVIEW 2.1.0: INTRODUCTI
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It further defines savings and cred
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from being influenced by individual
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Investment Guarantee Agency (MIGA)
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2.1.7: THE ROLE OF STOCK MARKET IN
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isk{Solnik 1974}. As a consequence
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• Access for New Firms- The prest
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of financial systems. The success o
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Mkwizu (1992) points out that Tanza
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(1994) conclude that this conservat
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areas. However, repayment schedules
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plus services (Aghion and Murdoch 2
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� Lack of appropriate and adequat
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savings of the community. Community
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ingenious entrepreneurs behind them
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Reforming the national small busine
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linkages based on both market and n
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combinations: private sector, gover
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Tanzania and most of its neighborin
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favorable rates and help keep finan
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The SACCOs, is a complex organizati
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2.2.10.1: Advantages for the SACCOs
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2.2.10.3 THE COMPARATIVE ANALYSIS B
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2. The importance of savings in the
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Commercial Banks are like the other
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presence in carrying on the traditi
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A summary profile of selected NGOs
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(ii) Competitive Financial Environm
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� Likewise, these institutions wi
Page 153 and 154: METHODOLOGY OF THE STUDY CHAPTER TH
Page 155 and 156: among variables such as the support
Page 157 and 158: • Checklist response • Rating a
Page 159 and 160: • What are the roles of instituti
Page 161 and 162: In each Region, a total of 20 SACCO
Page 163 and 164: 3.1.8: Data Processing The data res
Page 165 and 166: 3.1.12: Limitations • Difficult i
Page 167 and 168: Those students who are to write a M
Page 169 and 170: V. Generalizations and interpretati
Page 171 and 172: The method of collecting Primary an
Page 173 and 174: characteristics of participants, th
Page 175 and 176: How? Through experiment approach /g
Page 177 and 178: which the problem has got to be stu
Page 179 and 180: 4.1.2: Responses to Questionnaire.
Page 181 and 182: Outreach and Savings Mobilization
Page 183 and 184: iggest commercial city have more SA
Page 185 and 186: small farmers are most likely to sa
Page 187 and 188: 15 TPB … 16 TGT … 17 IFAD-Mbeya
Page 189 and 190: and bank balances which have been o
Page 191 and 192: However, operating income per total
Page 193 and 194: The Research Institutions in Tanzan
Page 195 and 196: microfinance services in both rural
Page 197 and 198: (xi) Do you inform SACCOs about you
Page 199 and 200: • Provide modern facilities and i
Page 201 and 202: validate this observation by asking
Page 203: fact that their SACCOs serves all k
Page 207 and 208: Year Real Private Disposable income
Page 209 and 210: Year Real Private Income Received b
Page 211 and 212: Model R R Squar e Adjusted R Square
Page 213 and 214: 213
Page 215 and 216: 215
Page 217 and 218: CONCLUSION The performance of micro
Page 219 and 220: 5.14 Please list in the other impor
Page 221 and 222: Bank and other institutions engagin
Page 223 and 224: Table 18A: SITUATION FOR THE SACCOs
Page 225 and 226: Table 19: SITUATION FOR THE AUDITED
Page 227 and 228: (a) Specific Recommendations. The r
Page 229 and 230: APPENDIX E: QUESTIONNAIRES USED TO
Page 231 and 232: 5.15 How have you been financing th
Page 233 and 234: Real Pinco RGD Rate Real GV Inv Dum
Page 235 and 236: In general, SACCOs in Tanzania have
Page 237 and 238: Finally, governments in Sub-Saharan
Page 239 and 240: 5.3.11 If the answer to 10.0 is “
Page 241 and 242: 5.3: RECOMMENDATIONS OF THE STUDY (
Page 243 and 244: REFERENCES: Ally M.Kimario, Marketi
Page 245: Working paper number 466, IDS, Univ
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The role of informal microfinance institutions in saving

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