Study reveals why it is tough for women to access loans

Thursday September 06 2018
Loan pic

Women pass before a Tanzania Women’s Bank branch. The bank has since been merged with another bank after having gone though financial troubles. PHOTO | FILE

Dar es Salaam. Lack of trust, tough requirements and lack of collateral have been singled out as being among factors that deny women entrepreneurs access to loans from banks and financial institutions in Tanzania.

The interviewed women also complained about various types of inappropriate behaviour by loan officers as two mentioned that loan officers asked for sexual favours in exchange for access to loans.

The study on accessibility of loans by female entrepreneurs published by Belgium based Catholic University of Leuven (Katholiek Universiteit of Leuventhe) apart from unattractive borrowing terms and default risk; many women argued that application processes were long and costly.

Most women interviewed said they didn’t believe that loan officers discriminated against women, but they complained about the unattractive borrowing terms offered by banks, including that of extremely high interest rates and collateral requirements.

Lead researcher Vanessa Naegels said in Tanzania women entrepreneurs weren’t deterred by a lack of supply, as policy makers put it.

The study findings show that women said that they had no collateral as they either didn’t own a house or land or didn’t have their husbands’ permission to use them as collateral. Entrepreneurs also mentioned that high taxes as well as adverse economic and political conditions reduced their profits.


As a result, many feared that they would fail to pay back their loans and would then face harassment or abuse by loan officers.

Others blamed them for exploiting entrepreneurs’ lack of financial knowledge, including that payments increase if they are late in paying back their loans, or that the bank has the right to sell their collateral.