This study aimed to examine factors that determine the access of Microfinance
services in rural Tanzania, using Mvomero district as a study case. The study
addressed the following research questions: What are micro-financial service
providers that operate in Mvomero District? What are the limitations to access to
microfinance services in rural areas? How acceptable are the financing mechanisms
employed by different providers? And what are the impacts of microfinance
institutions in rural Tanzania? The study was largely qualitative supplemented in
some aspects by the quantitative research methodology that based on descriptive
design. This facilitates facts findings and generalization on wide population.
The methods used in the field were mainly the in-depth interviews (IDIs), semistructured
interviews and survey questionnaire. For secondary data reports, books
and records were also used to supplement the primary data. The major findings show
that there was inaccessible of MFI’s services in rural areas due to various factors
such as poor infrastructure, negative perceptions toward microfinance institutions,
high cost and risk of operating and acquiring services scattered low population in
rural areas, low population that resulted in little profit and others like negative
perception of community about microfinance services, as well as low collateral
values.
On the basis of the findings of the study, the following were recommended: There
should be emphasis on the preferred financing mechanism as the best arrangement
for securing loans in the rural areas; linkage in microfinance arrangement should be
introduced to enhance effectiveness in financing services; the government has to use
Credit Cooperative Societies to channel their agricultural credit and members of
these societies should contribute on mutual consent; the credit provided should be
revolving in such a way that every member will benefit; and the government and
other development partners should take a necessary measure to provide important
infrastructural facilities in rural areas so as to make these places conducive for
microfinance services