The role of informal microfinance institutions in saving

• Bureaucratic constraints, lack of advocacy skills in cooperatives/cooperative
departments, leaders in cooperatives are uneducated and hence not easily recognized
by stakeholders.
• Poor industrial technology extension services to SACCOs in Tanzania.
• Financial support to SACCOs in terms of long-term loans as well as leading rate is quite
limited. SACCOs do not participate in the stock market, which limits the equity capital
formation. Poor infrastructure in most parts of the country; especially water and
electricity supply limits the operation of SACCOs. The business culture is very limited
with low entrepreneurial capacity of micro enterprises and inadequate reference in the
national policies and awareness of global changes and policies related to the
microfinance sector.
• Low equity participation from promoters because of unconfident personal savings
due to their level of poverty and low return on investment.
• Constrained access to money and capital markets.
• Lack of access to information given that it is costly, time consuming and complicated
at times.
• The problem and challenges that SACCOs contend with are enormous no doubt but
it is curious to know that some SACCOs are to overcome them. This gives hope and
should provide a basis for optimism that there is a way out. There must be some
survival strategies, which are not known to many SACCOs promoters .This research
is also intended to explore and unravel some of key business survival strategies,
which have worked for a few thriving SACCOs. The benefits of this could be
tremendous in that other SACCOs facing threats of extermination as well as new
and proposed new ones could also borrow a leaf from them.
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