- Mama Bahati Foundation (MBF), Iringa, Tanzania
- Anglican Diocese of Ruaha
Program Type and Services:
- Christian Microfinance Institution: “Credit Led”
This program provides microcredit based on the Solidarity Group model, as well as two savings services.
Compulsory Savings: Required from the date a loan is disbursed (i.e., no pre-saving is required, which differentiates MBF from other microfinance providers in the local area). This currently amounts to 30 percent of the amount loaned, however this is currently under review by the MBF Board.
Flexible Savings: These began when clients in rural areas requested the option to save more during certain times of the year, and are usually withdrawn in December or January for school fees and the start of seasonal agricultural activities.
Currently, all client savings collected by MBF are held in a separate bank account and not used as loans. This has been the case to date due to Bank of Tanzania regulations restricting the use of savings. Future financing options might include re-loaning these funds if regulations are met.
Training and Resource Examples:
- Entrepreneurship and business development.
Tanzania is one of the poorest countries in the world, with a population of 39 million people and an average per capita income of $1,000 per year. Iringa is a town in central Tanzania with a population of approximately 115,000 people, many of whom rely on small enterprises to provide an income for themselves and their families.
About 88 percent of the population live on less than $2 a day (World Bank, 2007); 85 percent of the female population is economically active in some form. Almost all adults are engaged in the informal sector, and 54 percent of all adults have no access to financial services. Commercial banks offer consumer loans at around 20 percent interest.
The Mama Bahati Foundation (MBF) was registered as an NGO in February 2006, providing microfinance services to women in and around Iringa. The project was the 'brain-child' of the retired Archbishop of Tanzania and was named after Mama Bahati, a woman who runs a small banana selling business. It took a loan of just $8 to break the unproductive credit cycle she was in with her former market seller and allow her to buy enough stock to make a profit large enough to repay the loan and grow over time.
Unlike Five Talents' other projects, the clients of MBF are solely women and the plan is to continue outreach to women in new communities as well as expand their target client base to include youth. Women have historically proved to be more successful in repaying loans and prioritizing the needs of the family. The program encourages women to start small enterprises as a means of gaining an income, independence and dignity both in the home and within the community. The local staff hold daily “cluster” meetings for groups coming from different parts of the town, enabling them to save and repay on a weekly basis.
Once staff members gain experience, the challenge in the microfinance sector in Iringa is to retain staff and keep motivation levels high, to prevent ‘poaching’ by other microfinance institutions in the area. We hope to see 4,010 clients in the program by early 2013.
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Updated December 2012