THE Tanzania Association of Microfinance Institution (TAMFI) has embarked on a new programme to build the capacity of the country's microfinance sector.
Over 50 institutional members of the body, which include small and big microfinance institutions across the country, will benefit from the cooperation project between TAMFI and the German-based Savings Bank Foundation for International Cooperation (SBFIC).
The two organisations have signed a Memorandum of Understanding (MoU) that will see the institutional members benefit from state-of-the art training and capacity building services. SBFIC aims to enhance the professional capacity of its partner institutions, empowering them to offer their customers a permanent access to financial services.
TAMFI chairman, Mr Edmund Mkwawa said yesterday that microfinance professionals would under the programme trained on how to handle their clients and learn their behaviour as well as assessing the impact of economy and capital market. He said the institutions would be also trained on how to manage their daily activities for improved performance, take advantage of opportunities and invest well in order to maximize outreach.
"This will ultimately lead to high rates of loans repayment a necessity for microfinance institutions to survive", he said, adding: "One of the causes of low loan repayment is lack of education on both loan officers as well as the borrowers but if both parties are adequately educated on how microfinance works, the level of defaulting would go down," he said.
According to SBIC Official, Ms Marret Schadwinkel, the project aims to increase the availability and qualification of employees in the financial institutions through basic vocational education. "We aim to improving access to financial services in the country and the business simulation is meant to increase and strengthen personal and professional development in Tanzania.
We believe by providing the education to financial institutions under TAMFI the benefits will trickle down to the whole microfinance sector," she said. She added that microfinance institutions are very key partners in providing loans to small and medium sized businesses.
The first round of training that focused on strategic management of MFIs was conducted in Arusha and Dar es Salaam recently with TAMFI members involved in and interactive sessions. Mrs Winnie Terry, TAMFI Executive Secretary was impressed by the training outcome because it was practical and involved making decisions while taking into account internal and external factors which influence businesses.
"It was fun too when participants were competing each other in making appropriate business decisions which led into profits or losses", she said. Mr Amulike Ngeliama, Chairman of Mtoni Lutheran Church Saccos Ltd, who attended the training in Dar es Salaam was quite impressed. "The training was an eye opener...and very important to the microfinance institutions," he said.