The Stratifications and Competition in Microfinance

 

Wednesday, June 10, focused on the stratifications and competition in microfinance for small business development in the Musoma area. We visited three microfinance lenders in the morning: FINCA (a pioneering international nonprofit), Tujijenge (recent for-profit microfinance lender partnered with KIVA.org), and Musoma SACCOS (a Tanzanian credit union with offices nationwide). We were able to compare the different types of clients and loans across the platforms and see how competition among the lenders is benefitting borrowers. For example, FINCA has moved from weekly payback to monthly payback periods to allow borrowers more time to use the funds to purchase goods and then resell with profit to repay the loan. In the afternoon we met with 4 different borrowers in the Nyegina area who borrowed from AFREDA (another lender in Musoma area) and Musome SACCOS. They are using the loans to buy in bulk at wholesale prices and sell at retail to make profits that cover loan repayments and pay school fees. They look forward to further business management training from the new Madaraka Nyerere Library and Community Resource Center in Nyegina, which will be easier to access for many people than going all the way to Musoma.

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