Why micro loans are key to women led enterprises

Women are key players in the private sectors and micro, small and medium enterprises in Tanzania. The proportion of women-owned enterprises is reported to have increased from 35 per cent in early 1900s to 54.3 per cent in 2012.

This amounted to 1.716 million over 99 per cent of which are micro enterprises with fewer than five employees.

Although these women could serve as potential drivers for the economy by generating jobs and reducing poverty, they are faced by multiple obstacles. Lack of access to micro-loans being one of them.

AS TANZANIAN Women celebrate International Women’s Day, the National Economic Empowerment Council (NEEC) is attempting to alleviate this problem by disbursing a total of 12.9bn/- in loans to about 17 000 micro, small and medium entrepreneurs .

NEEC’s Executive Secretary,y Beng’I Issa told ‘The Banker ‘ that the loans were disbursed from 2008 to date through the Mwananchi Empowerment Fund (MEF) for both women and men entrepreneurs.

The loans were issued to 9, 234 women entrepreneurs , 58 Savings and Credit Cooperative Societies (SACCOs) and 172 Village Community Banks (VICOBA) that comprise women and men, coming to around 52 percent of the total loans.

According to her, Currently Tanzania has more than 2.5 million VICOBA members within more than 200,000 VICOBA groups across the country.

The loans were offered to women entrepreneurs engaged in fishing activities, food processing, agriculture sector, livestock keeping, soap making, wine making.

These small business owners are often affected by various barriers from their cultural environments based on traditional reproductive roles and power relations .

According to the Women’s entrepreneurship development in Tanzania report, women still have difficulty claiming rights to land, property and assets which could be used as loan collateral. By injecting the loans into local VICOBA groups, which do not require such collateral, the NEEC loans have helped to alleviate this problem.

NEEC provide loans facilities in the form of group and individual loans, for individuals the loans range from 1–5million per person while group loans range from 500m/- and above depending on their needs.

“As we celebrate International Women’s Day in Tanzania, we are very proud of what we have done to women entrepreneurs in Tanzania because the loan repayment is very good and 93 percent of the total loans have been returned to the bank to allow other micro, small and medium entrepreneurs access capital and credits,” she said.