Microfinance Program

In June 2008 we initiated a Microfinance Program at the Children’s Village, which provides financial services including credit, savings and business skills training to our neighbors in surrounding villages. Financial services have never been available to our neighbors. Indeed, introducing the concept of formal banking has been a principle challenge for the program.

In our area there is little or no land ownership among the residents as most of the region is partitioned into coffee estates, usually in the hands of absentee owners. Residents live in squatter camps that serve as the labor pool for these plantations. These squatter camps, established decades ago, continue to grow as generation upon generation of families attempt to eke out livelihoods. Those who are employed as seasonal coffee pickers receive approximately $140 per year in salary. At 39¢ per day, this is well below any poverty line calculation used by government agencies or aid organizations. The result is a growing population who struggles with 75% unemployment, high illiteracy and an average life span of 42 years (according to statistics provided by our village leadership). 

We now service 250 clients, 136 of whom are women, in groups of 4-6 people, who receive business management training prior to receiving their first loan. Our clients are supporting 637 children and an additional 678 household members through their businesses. Our average loan size is $190 with loans ranging from $80-$750. 

Activities funded by our loans include tailoring, store construction, carpentry, crop cultivation as well as raising and selling chickens, goats, and pigs; rice processing; making and selling bricks; sewing and selling clothes. Already profits from these activities are being directed towards household expenses (such as secondary school fees, medical costs), the expansion of current business concerns, or toward some form of savings to guard against unforeseen expenses and shocks (such as drought, health emergencies). Training foci include basic recordkeeping, small-business planning & management, marketing, and savings mobilization. 

Microfinance Program Initiates Savings and Credit Cooperatives (SACCOS) 
In keeping with our mission to alleviate poverty and the causes of unwanted children, TCF has recently launched a new initiative through our Microfinance Program that will mobilize our neighboring communities to take charge of their own destinies.

In June 2009 our Microfinance Program helped to create 3 savings-and-credit cooperatives (SACCOS) with a combined membership of about 150 of our Tanzanian neighbors. These organizations will be an alternative route for community members to access financial services. Essentially, cooperative members pool their savings and make loans to one another, to be repaid with nominal interest. TCF’s role is to train the elected leaders of these cooperatives to manage the affairs of the organization.

These cooperatives differ from our Microfinance Program. While TCF offers small-business loans to entrepreneurs, the cooperatives will offer loans for any number of purposes including payment of school fees, purchase of land, home construction, and the like. Because the funds are derived from the members themselves, the cooperatives can be self-sustaining, with no need for external donor funding. Further, members create their own Constitution that guides the organization and conduct their own affairs with minimal outside interference. The concept of the SACCOS is a ‘new idea’ for our neighbors, which they’ve embraced with ingenuity, motivation and determination to help one another succeed.

The future of our Microfinance Program will increasingly involve facilitating the mobilization of local communities and the mobilization of their savings to help one another to achieve their dreams.

For more information about the Tanzanian Children’s Fund Microfinance Program, please contact: Magda Heywood at microfinance@tanzanianchildrensfund.org