Microfinance Institution Services And Women’s Socio-Economic Development In Dodoma Municipality-Tanzania

ABSTRACT

This study was conducted in Dodoma Municipality-Tanzania, aiming at assessing

women‟s socio-economic development in relation to their involvement in MFIs. The

specific objectives were to examine those micro-credits services and savings

attracting women in MFIs, to analyze the women‟s activities derived from MFIs

services, to assess the current and potential collateralization that make MFIs trust

women and to assess the contextual factors influencing women‟s socio-economic

development.

A cross-sectional research design encompassing both purposive and proportionate

random sampling was adopted, About 402 respondents were involved. Both

Qualitative and Quantitative data obtained and analyzed through SPSS and ANOVA.

Findings from this study suggest that women‟s socio-economic development will

remain at stake despite of their repetitive borrowing in MFIs because there is great

disparity between loan application purpose and utilization. The role of MFIs has

remained questionable because there are contextual factors that are hardly addressed.

These include political, legal framework, culture and lending approaches causing

unsustainable purchasing power of women despite of MFIs intervention.

Furthermore, MFIs are continuing to exhaust funds from poor to make them even

poorer through high interest rates, short tenured small loans imbedded under group

lending approach, which are used as survival strategy of MFIs.

This study recommends the government through BOT to establish laws that compel

MFIs to recognize potential collaterals that are affordable by women and intervene

on operations of Non depository taking MFIs particularly control on interest rates.