Dar Es Salaam, Tanz - SNHU Academic Archive - Southern New ...

13Microfinance i s the provision of financial service , primarily savings and credit to poorhouseholds and microenterprises that do not have access to formal financial institutions.Experience shows that microfinance can help the poor to increase income, build viablebusiness an d reduc e thei r vulnerabilit y to externa l shocks . I t ca n also b e a powerfulinstrument fo r self-empowerment b y enabling the poo r to become economi c agents ofchange. Borrower s must hav e deb t capacity, ( i.e capacit y to repay ) no t just nee d fo rcredit, otherwise, credit simply makes the client's situation worse, slipping further int opoverty with added burden of debt.Banks and non-bank financial institutions, SACCOs and NGOs are freeto develop microfinance service s on the basis of their own internal objectives - whethe r profit, povertyalleviation, self-help or other motivations. The Government expects the institutions thatdecide to become micro finance service providers to fulfil l thei r responsibility to learnbest practices an d to apply sound financial principle s in the deliver y of their services,particularly with respec t t o pricing , loa n delinquency control, financial reporting andinformation management , appropriat e technique s an d products , gende r equit y an dgovernance.Tanzania i s a membe r o f the Internationa l Cooperativ e Allianc e (ICA) , whic h i s anindependent, non-governmenta l associatio n tha t unites , represent s an d serve scooperatives worldwide . Its ' member s ar e nationa l an d internationa l cooperativ eorganisations i n all sectors o f activity including agriculture , banking, energy, industry,