How bank loans fight poverty at grassroots

MWANZA: MEETING a small-scale entrepreneur, Ms Zaitun Juma, during the launch of FINCA Microfinance Bank-Tanzania’s new branch in Mwanza, recently, it was a new perception to realise that people make fun of a banker as a fellow who lends his umbrella when the sun is shining and wants it back the minute it begins to rain.

Digging deep into this we discussed at length on the importance of a bank as being the heart and lifeblood of any functioning economy. A banking system is the key to economic growth and development. It is essential to unlocking wealth, creating opportunities, providing jobs and facilitating commerce.

With FINCA opening a new branch in Mwanza, it was another opportunity to thank the government for creating a conducive environment in the country, where businesses are prospering and trickle down to reach people at the grassroots.

Narrating her story of how FINCA has played a great role in pulling her out of poverty, she said that in 1998, she secured a loan of 30,000/- as capital for her Kitenge sale business. Being honest to return the compromised amount to the bank, the business picked up to the extent that currently she brags of running a 5m/- kitenge sale empire in the suburbs of Mwanza City.

She added: “I was asking why my fellows were stepping out of such lucrative business and realised that they dodged to go for training also on business and money management offered by the very bank that gave them the loans.” Elaborating, she advised her fellow traders to attend such regular public financial management education offered by the banks, instead of only drooling to acquire money without skills to run business.

Commenting FINCA Microfinance Bank Chief Executive Officer (CEO), Edward Talawa narrated the history of the institution back in 1998, when it was started in the country with the sole aim of fighting poverty at the grassroots.

By then the lowest amount it was giving women in groups was 30,000/- to 50, 000/-, let alone currently covering 3.2 million people and enlarging to 21 branches with modern agents (FINCA Express) and FINCA Mobile among others.

He added: “FINCA has released more than 1.42tri/- as loans from the year 2012. Shedding light on why FINCA Microfinance Bank in Tanzania had to open a new branch in Mwanza, Representative of FINCA Stakeholders Jeff Smith said that it was in answer to the unwavering dedication of Tanzanian team to combat and alleviate poverty in the country, aligning with the mission of FINCA International.

He added: “The sixth phase government under Dr Samia Suluhu Hassan, provides unwavering support and guidance, prompting FINCA Microfinance Bank. This also symbolises a noteworthy achievement for FINCA on a global scale, and the continuous support from FINCA International’s Head Office in Washington DC to the Tanzanian team. He further said that the country has provided invaluable experience for the business and many other countries to learn from, especially in the areas of digitisation.

“Based on the experience in Tanzania, we at FINCA Headquarters have found it necessary to transform and enhance FINCA’s financial operations globally and within the FINCA network, Tanzania has been at the forefront in adopting and embracing our digital banking products to facilitate financial solutions.

The success of this initiative has inspired and compelled other countries to follow suit and implement similar solutions in their markets. This strategy has significantly contributed to the realisation of FINCA’s mission across the network. I assure you that the entire Tanzanian community that FINCA International remains committed to working alongside the Government and people of Tanzania, directly and indirectly to support initiatives aimed at eradicating poverty and improving the livelihoods of communities in the country,” he pointed out.

Gracing the event, Nyamagana District Commissioner (DC), Ms Amina Makilagi, urged the Mwanza residents to make good use of FINCA’s loans to enable them still grab the untapped investment opportunities especially in agriculture, fishing and tourism sectors.

Likewise, she called upon such financial institutions to intensify public financial education to the public, especially traders so that any money taken as a loan is managed professionally in the business system.

She added: “Any person who takes a loan should consider timely taking back what was agreed on so that others also can be given the money as loans. Consult financial experts every time for help. We need economic changes in Mwanza, given the fact that the government has set a conducive environment for both local and foreign investors to do business.”