Oikocredit’s 2011 Summer meetings ahead of its Annual General Meeting begin today in Dar es Salaam, Tanzania. To mark the occasion, Oikocredit is launching the newest addition to our blog, Tour Around the World with Oikocredit. Poverty looks different in every country, every community. With partners in 71 different countries worldwide, Oikocredit has an opportunity to share important information about poverty in the countries in which we work. This week we share information about Tanzania.
Residents rise early to go to the Mwanza market, clogging the streets. Vendors stand with umbrellas in the dusty square, hawking their wares as villagers pass through. Women in patterned skirts arrange their tomatoes, watermelons, and bananas into small mounds. The sheer amount of vendors and the wealth of goods they offer create a notion of the entrepreneurial spirit in Tanzania. The economy of Mwanza, located on the shores of Lake Victoria, is primarily agricultural. Mwanza was hit especially hard by recent food crises across the Kenyan border, leading to a rise in local poverty.
Poverty is largely rural although the number of urban poor is growing along with Tanzania’s unstable economy. In urban areas the poor are mainly those who are unemployed or working in the informal sector. Inflation (caused by rising food and oil prices), the lack of private investment, and weak institutions are holding back economic growth and contributing to poverty.
Although the Tanzanian government reports that less than 34% of its residents live below the poverty line, the reality is that roughly 72% of Tanzanians live on less than $1.25 per day.Poverty in Tanzania is characterized by lack of education, lack of access health services, a high number of family members living under one roof, and susceptibility to disease, such as HIV/AIDS. These characteristics describe the rural nature of poverty in Tanzania, where villagers are often isolated from available infrastructure and public services such as markets, health care, and education.
The microfinance climate in Tanzania is populated by different types of lending institutions: commercial banks, community banks, MFIs, Savings and Credit Cooperatives (SACCOs), cooperatives, and NGOs. Products offered include lending services, deposits, insurance, leasing, transfers, and mobile banking (via cell phone or PDA).
In 2006 Oikocredit Tanzania opened its door and has since loaned 30 microfinance and cooperative organizations the equivalent of USD 30 billion in local currency. Beyond funding financial services, Oikocredit also supports educational scholarships, credit cooperatives, aid for disabled children, among other projects. Currently, we reach over 60,000 Tanzanian borrowers, 52% of which are women.
One of our most successful partnerships is with the Mwanza SACCOs Ltd.*** As a coop, Mwanza SACCOs provide microloans to small business owners and traders, most of whom sell clothing or food products in the local market. These loans help members offset the shocks of future food crises and expand the stock of their small businesses.
*Provided by Mark Schreiner based on Tanzania’s 2007 Household Budget Survey
**Selected characteristics are from the Tanzania PPITM and associated percentages are based on Mark Schreiner’s analysis of Tanzania’s 2007 Household Budget Survey data used to create the PPI for Tanzania.
*** SACCO is a Savings and Credit Cooperative Organization.