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

25According t o Kironde , J.M.L (1992) , realizatio n o f th e importanc e o f micro-financ elending increased due the following reasons;* Th e need to tackle poverty which is prevalent an d in some cases increasing in boththe rural and urban areas.• The declining role of the publi c sector, and the increasin g role of micro and smallenterprises (MSE) in promoting growth and development, offerin g employment an dreducing income disparities;• The realizatio n that increase d participatio n an d contributio n o f MSEs lea d t o a nincreased need for financial services, particularly credit, to support their initiatives;• The unwillingness of the forma l financia l institutions (FFIs ) to offe r credi t t o th epoor or small business undertakers. In any case, the latte r would find it difficult t omeet the conditions set by the FFIs to extend credit to their operations ;• Economic liberalization that has see n many FFIs streamlining their operation s an dconcentrating o n profitable ventures , thus leaving out rura l areas and th e poo r ingeneral.Microcredit came to prominence in the 1980s , although early experiments dat e back 30years in Bangladesh, Brazil an d few other countries. Althoug h in the past other peopleconsidered microfinanc e t o b e the sam e as microcredit, they differe d a s time went by.Microcredit refers to provision of credit only, while microfinance covers a broader rangeof financial services, encompassing credit , savings, insurance, leasing, housing, paymenttransfers and remittance services .