Microfinance Tanzania, assessment of the gap between services provided and market demand

Abstract

This paper assessed the gap between services supplied by Microfinance institutions and services demanded by clients. The study was conducted at Arusha and Arumeru districts in three councils. The study findings revealed that Microfinance institutions supply deposit, credits, insurance, and training, payment, and money transfer services. Clients are demanding deposit, credits, insurance, training, and pension services. The conclusion drawn from the comparison of services supplied and demanded is that services supplied are less than services demanded in terms of types and features. Microfinance institutions are, to a greater extent, supplying the conventional microfinance services (deposits and credits) while clients are interested in the supply of a wide range of financial services including insurance and pension services. Based on the identified gaps the study recommends amendment to the National Microfinance Policy, restructuring of microfinance service portfolio, establishment of members self-managed institutions, and improved government supervision to ensure the attainment of the poverty alleviation goal