The largest country in Eastern Africa, Tanzania hosts abundant natural resources, vast wildlife reserves, and over 120 localtribes. At the same time, Tanzania is one of the poorest countries in the world, with a population of 50 million people and an average per capita income of only $920 per year (1). Nearly 70 percent of the population lives below the poverty line of $1.25 a day and 16 percent of children under 5 are malnourished (2).
Most residents rely on farming or small businesses to provide an income for themselves and their families. Roughly 85 percent of the female population is economically active in some form with almost all adults are engaged in the informal sector. Nearly half of the population lacks access to financial services. Commercial banks offer consumer loans at around 20 percent interest.
Five Talents works in Tanzania in partnership with the Mama Bahati Foundation (MBF) and the Anglican Diocese of Ruaha, providing financial inclusion services. Small business owners are invited to join small groups where they receive training in entrepreneurship and business development and begin savings and loans using a solidarity group lending model.
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.
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(1) World Development Indicators, World Bank, 2014.
(2) Global Human Development Report, UNDP, 2013.