Where We Work : Tanzania : Microfinance

Across Tanzania every week, 100,000 women attend their local BRAC microfinance meetings. They come to repay their weekly loan instalments, apply for new loans, and buy health products from their community health promoter.

Our microfinance programme has been designed to serve a large number of poor people – mostly women – with reliable access to cost effective financial services.

They also receive additional support – such as specialist training and input supplies - for their varied small businesses.

Main features

• Village Organisations
• Micro loans
• Small Enterprise Loans

Village Organisations

The village organisation is the basis for BRAC to provide microfinance and other programs to the community. A village organisation is a group of 20-30 women that meets weekly to discuss credit decisions and make loan repayments.  New borrower groups meet four times before any loan disbursement takes place.

Micro loans

Our main microfinance product is the micro loan. We offer this exclusively to women on low incomes who are not served by other microfinance institutions.

Borrowers typically operate businesses that provide products or services to their local communities. They range in age from 20-50 years, and have little or no education.

We go directly to the poor women we are targeting and meet them in their villages, homes and places of work.

Features of micro loans:

• Exclusively for women
• Loan repayments in small weekly instalments
• No physical collateral needed
• Loan range: USD 50-800
• Competitive interest rates
• Loan forgiveness and grant given to dependants upon borrower’s death
• Services delivered to member’s village
• Available in rural and urban areas
  

Most popular loan uses:

• Retailing – grocery, hardware stores
• Running a bar/drinks shop
• Food cooking and vending
• Local beer brewery
• Charcoal selling
• Selling raw fruits and vegetables
• Selling second hand clothes/shoes
• Running a beauty parlour
• Vegetable cultivation
• Poultry and livestock rearing
• Tailoring

Small Enterprise Loans

In 2008, we introduced a new microfinance product – small enterprise loans. These are larger loans offered to small entrepreneurs who have limited access to formal financial systems. Both men and women can apply and the instalments are monthly.

Features of Small Enterprise Loans:

• Available to both men and women entrepreneurs
• Loan range: USD 1,000-5,000
• Competitively low interest rates
• Repayment mode: equal monthly instalments