TAMFI Discusses Steps to Improve Opportunities and Address Challenges in Tanzania’s Microfinance Sector

DAR ES SALAAM – The Tanzania Association of Microfinance Institutions (TAMFI) held a special advocacy meeting with various stakeholders in Dar es Salaam on October 4, 2024. The meeting, which took place at the Seashells Millennium Hotel in Makumbusho, aimed to discuss the overall development of the microfinance sector and assess its contribution to the national economy. It also focused on finding ways to improve service efficiency and enhance the image of microfinance institutions in the community.

In her opening remarks, TAMFI’s Board Chairperson, Devotha Minzi, highlighted that the primary objective of the meeting was to recognize the significant role that microfinance institutions, particularly TAMFI’s members, play in providing credit to citizens who larger financial institutions, such as banks often overlook. She emphasized that the increasing amount of loans offered by microfinance institutions is evidence of the high demand for credit in the country. These institutions lend to economically vulnerable customers who often do not meet the creditworthiness criteria required by larger financial bodies. This sector plays a crucial role in expanding financial inclusion, particularly through loans aimed at production and entrepreneurship.

However, Minzi pointed out that despite the good work done by many TAMFI members who follow best lending practices, the meeting was also a platform to discuss and find solutions to customer complaints. Key issues, such as high lending costs and failure to adhere to sound lending practices, needed to be addressed to improve service delivery and build a positive image for the sector.

In the meeting, TAMFI members discussed the importance of adhering to the Code of Conduct to distinguish themselves from other lenders. Through this code, members are committed to upholding high ethical standards in their operations. The meeting also focused on the importance of complying with guidelines set by the Bank of Tanzania (BoT) to ensure that all microfinance institutions operate transparently and responsibly.

Winnie Terry, TAMFI’s Executive Director, highlighted the many opportunities available in the microfinance market, while also acknowledging the sector’s challenges. She emphasized the need for collaboration among stakeholders to enhance efficiency and promote the sustainable growth of microfinance institutions. Terry reaffirmed TAMFI’s commitment to transparency and efficiency in the sector, calling on all stakeholders to uphold ethical standards to create positive changes within the community.

Participants also discussed strategies to tackle challenges faced by microfinance providers, with a focus on improving the service environment and addressing issues such as borrower defaults and negative public perceptions.

The workshop concluded with a pledge from microfinance providers to work closely together to overcome the sector’s challenges. Cooperation between lenders, borrowers, and the government was deemed essential to ensure that services meet customer needs and contribute to the overall growth of the national economy.

The event attracted representatives from various organizations involved in microfinance and financial services, including senior managers and directors from BRAC Tanzania Finance, SELF Microfinance, Endeleza Credit, among others. Their participation underscored the shared commitment to addressing issues facing the sector and improving the accessibility and impact of financial services on underserved communities.