Tackle woes, microfinance groups urged

Dar es Salaam. The number of Tanzanians who access financial services remains low due to internal weaknesses of providers of such services, the apex body of microfinance institutions has said.

The weaknesses, according to the Tanzania Association of Microfinance Institutions (Tamfi), include the cost of financial products, packaging, technology, terms, conditions, practices and relationships among other issues.

“Let us [providers of financial services] take strong measures to address our internal weaknesses while simultaneously pushing for improvement in the business environment and assists the government in addressing customers’ weaknesses,” Tamfi chairman Joel Mwakitalu said here recently.

Delivering a key note address at a two-day Rural Microfinance Conference here that ended during the weekend, Mr Mwakitalu said it was possible to register profits sustainably without exploiting and harming customers

According to 2013 Finscope survey conducted by the Financial Sector Deepening Trust, 17 million out of almost 45 million Tanzanians do not access banking services and most of those who are excluded live in the rural areas.

For a long time, many have been heaping the blame for the poor access to financial services on customers’ income levels and their literacy on the subject.

They also blame business environment especially in areas pertaining to distance (that most service providers are located too far from the their clients in remote areas) as well as on poor physical infrastructure but with no regard on weaknesses of service providers and lack of innovativeness in addressing customers’ needs.

An agriculture and rural finance advisor with Financial Sector Deepening Trust (FSDT), Mr Samora Lupalla, told the conference that it was paramount for mechanisms to be introduced to include data from rural microfinance organisations including savings and credit cooperative socities and credit reference Bureaus.