Small Enterprise loan
BRAC established the small enterprise programme (SEP) in 2008, to financially empower young entrepreneurs who do not have access to formal financial services. SEP offers small individual loans to men and women who are less vulnerable than the microfinance group members. Most clients are now successfully running their businesses and generating employment opportunities for others. Higher economic benefits are indicated through single loans, placing less credit burden on other community members. Members who have successfully repaid their loans are able to expand their businesses by taking further loans. SEP also provides financial support and capacity building to help expand their businesses.
Most of BRAC’s small enterprise clients are now creating employment opportunities through their business initiatives. These results in higher economic benefits through single loans and less credit burden to the community. Some members, who borrowed microloans from BRAC and successfully repaid it with their business profits, are mature enough to take larger loans and expand their businesses in a bigger scale. In such situations, small enterprise programme provides financial support and business knowledge for expansion of their businesses. BRAC is providing credit support to small scale enterprises like small manufacturing businesses of wood and wooden products, trading businesses, carpentry, handicrafts, hotels and restaurants, as well as in agro based sectors like agriculture, poultry and livestock.
BRAC started using mobile money in 2012 by piloting in three branches of Dar Es Salaam as an opportunity to collect loan installment from borrowers by using their mobile handsets, which resulted in reduced cost in operation, and proved to be riskless, convenient and effective.
Since January, 2014 the Small Enterprise Programme (SEP) started using mobile money in collecting monthly installments from the borrowers (Loan repayment) in all 59 branches both in Mainland Tanzania and Zanzibar. BRAC is working with Vodacom Company (Mobile Network Operator MNO) which provides mobile money (M-PESA) services. Currently, about 75 per cent of the current borrowers are using mobile money.
The pilot phase for investment fund has been successful among Tanzanian entrepreneurs, expanding their business in Agricultural (maize) and livestock (poultry) since it’s launching in 2014. Entrepreneurs from Iringa, Mbeya, Dodoma, Arusha and Manyara were supported financially through this process. Due to its success, the first round of the project was launched on March, 2015 in 15 regions of Tanzania. The funds will reach a large number of entreprepreurs and help them in their business investment through the training given to them on business operations and management.