Anna Rweyemamu and Godwin Mloka
Develop and encourage linkages between young people and economic opportunities
In Tanzania, microfinance is viewed as a viable option to alleviate poverty by making sure that low income clients access reliable and useful financial services. Microfinance activities can be summarised as deposit taking loan activities and non-deposit loan activities. It is estimated that microfinance service providers have a combined outreach of approximately 500,000 clients, which is only about 5% of the estimated total demand. This indicates that there is untapped potential to grow the microfinance industry. Key competitors for Microfinance Institutions (MFIs) include co-operative based societies, mobile money providers and informal loan providers such as loan sharks.MFIs have a healthy appetite for technology and often use it as a means to increase their customer base. A major challenge they are facing is moving into the mobile money lending space which is currently dominated by Mobile Network Operators (MNOs).We are developing and piloting a mobile-based lending platform which can be used by MFIs to provide micro credit products. It will use an algorithm based on customer use of MNO services to assess credit-worthiness, assign individual credit limits, and lend to new loan applicants.