AUTHOR
Josefsson,Emma; Åberg, Pia

DATE
2004-08-27

DEPARTMENT
Business Administration and Social Sciences / Economics

SUMMARY
The purpose of the thesis is to evaluate the performance and constraints of the micro-finance institutions and conditions for poverty reduction in Tanzania. In order to fulfil this purpose the authors have used institutional theory combined with traditional neo-classic micro theory. The National Poverty Eradication Strategy was formed in Tanzania in 1998 with a long-term objective of the government to reduce the poverty in the country. The objective more specific, was to reduce poverty with 50 per cent by the year of 2010 and eradicate poverty by the year of 2025. The authors have developed a number of factors for efficient micro-finances, if these conditions are met the micro-finances are presumed to be sustainable and useful. A field research survey will encompass interviews with micro- finance institutitions in micro-finance non-governmental organisations, registered commercial banks, registered non bank financial institutions and other important influential organisations. The conclusion of thesis is that the micro-financing is a good tool for of reducing poverty, even if it is not completely efficient today. The micro-finance institutions have not succeeded in reaching out to the people in most need of the credits, the vulnerable poor. It is only the relatively poor already in business that are accepted as borrowers while new business starters, who are be in more need of financing support that are not accepted.

ISSN 1404-5508 / ISRN LTU-SHU-EX--04/220--SE / NR 2004:220