Access to finance is transforming lives
Since the future is unpredictable, it is only natural that the vast majority of ordinary citizens normally faced with many shock would save a little of their income to deal with any emergences that may arise. Hence, it is not surprising that most of the ordinary people in the countryside are seizing upon the access to finance through intermediaries to keep their savings in safe and secure places as well as diversify their income base by investing in a new projects and expanding their existing businesses. Most surprising, the vast majority of ordinary people are now borrowing and investing heavily in the education of their children. Of all the benefit of greater access to finance to the ordinary Tanzanian, being able to educate their children with loans from these intermediaries seems to be the benefit most valued.
The testimony on benefits of greater access to finance from a random sample of 268 microfinance bank customers surveyed in April 2006 is exactly the same as testimony from a similar sample surveyed in October 2004. the new survey show that the majority of ordinary people take advantage of greater access to finance to accumulate assets, diversify their income base, and build human capital by investing in their children’s education.
Take the case of Madam stella Uhagile of muvikima and resident of matembwe village, for instance. Stella and her one child live alone some seven kilometers away from Lupembe township, her nearest administrative center, having been widowed soon after marriage. Apart from Lupembe SACCOS Ltd, one of the 22 bank-assisted intermediaries in Iringa region where she is a shareholding customer, she does not know of any other financial institution in the district. This is the first financial institution she is dealing with in her lifetime and find the nearest bank branches to too far from her home.
So far, Stella has taken three loans from the bank-assisted intermediary the last one just two months before the survey and is generally satisfied with services provided by the SACCOS. She used the first loan to start business for the first time, just after the death of her husband. Actually it is this event that forced Stella to join the SACCOS in pursuit of a livelihood. Happily, with this initial loan from Lupembe, she was able to venture into business and to pay for rent, which she did not have at the time. With the second loan, she was able to add new items to her stock; soft drinks and flour, and at the time of the survey could earn enough income to save a little for the future. When she took the third loan, she continued to add new items to her stock by purchasing for sale items like shoes, soap, and cooking oil, which she did not previously have in her shop. When Stella gets her fourth loan from the SACCOS, her dreams is to make brick for building her own three times the amount she had in her account after taking the first loan.
Last Updated: Monday, 01 December, 2014