The role of informal microfinance institutions in saving

(a) Specific Recommendations.
The recommendations of this study are based on the specific objectives and research questions,
and findings of this study. In view of these, the following are recommended:
(a) More measures should be undertaken by Unions of SACCOs and the Government of
Tanzania to increase more formation of SACCOs in rural areas where majority of Tanzania
live. This should go hand in hand with measures aiming at increasing disposable income of
rural community, so that they remain with enough income after allocation part of their
income to consumption expenditures.
(b) The Government of Tanzania in collaboration with financial institutions and SACCOs
should take more measures which will ensure that more borrowed funds by SACCOs should
be allocated to rural small scale agriculture and also to investment in shares of companies listed
in the Dares-Salaam Stock Exchange in order to increase diversification of loaned Sacco’s funds.
The Government of Tanzania through its Ministry of Agriculture and Cooperatives should
establish measures which will lead to effective approaches of assessing variations of SACCO’s
portfolio in Tanzania. This will thus effectively supplement the traditional methods of assessing
SACCOs performance which are still practiced in Tanzania, such as number of members,
number of loans issued, amount values of loans recovered etc which have proved ineffective
to assess SACCOs performance in Tanzania.
Measures should also be established whereby SACCOs will be in positions to examine,
appraise and evaluate member’s micro projects financed by SACCO’s loans. This will bridge
the current gap, whereby after borrowing; no any follow up measures are implemented by
SACCOs to assess the performance of members’ projects financed by SACCO’s loans. This in
turn has contributed to significant number of SACCOs borrowers to use the borrowed loans
for the purposes not intended cashiers.
Measures should be jointly undertaken by the Government of Tanzania, banks, pension funds,
Capital market/Stock Exchange to and Union of SACCOs in Tanzania to enable SACCOs design
new financial products which will suit different needs of SACCO’s members in both rural and
urban areas of Tanzania. In turn this will facilitate SACCOs to play its primary role of assisting
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