Tanzanian Micro Enterprises and Micro Finance: The Role and Impact for Poor Rural Women

Abstract

This article explores the nature of micro finance, or micro credit, in rural Tanzania. It begins by examining the types of finance available to the poor who operate micro enterprises. We then consider the intended role and availability of micro credit in alleviating poverty. We find that most institutes which offer loan facilities operate mainly in urban centres, thus restricting accessibility for the rural poor. Moreover, the modest lending conditions have also created an obstacle for the poorest women. The empirical part of our study examines the impact of one institution, the SELF project which is specifically intended to address these issues. By means of a survey, we find that SELF loans have had some benefits in improving the profitability of micro enterprises run by rural poor women, but there seems to be little long-term effect as measured by increases in household assets.