The main objective of this study was an assessment of the effects of microcredit on the

performance of women owned microenterprises in Tanzania, a Case of Arusha Municipal and

Arumeru District Council. A total of 70 questionnaires were distributed, 65 were returned (93%
response rate). Out of these returned questionnaires, 63 were correctly filled and therefore used
for the descriptive statistical analysis. 2 returned questionnaires (not correctly filled) contained
missing data and were simply discarded because those correctly filled were sufficient for the
analysis.

By means of a quantitative and qualitative approach, the case‐study involved a total of 65

women, clients of National Micro-finance Bank (NMB), Akiba Commercial Bank, PRIDE,
SEDA and Mwananchi Financial credit service based in Arusha Municipal and Arumeru District
Council. Researcher applied both probability and non-probability sampling techniques. The
different methods of data collection such as personal interviews, observation, documentation and
questionnaire were applied during the study. Moreover, the data was analyzed quantitatively and
qualitatively.
The results have been analyzed with the help of a framework in which parameters related to; loan
size, interest rate, repayment period, loan experience, Training, General management of
business, Qualities of entrepreneurs are regarded to have positive effects in the performance of
women owned microenterprise hence results to effects on Investment, Employment, Social
effect, Economic effect, Personal and family effect and Leadership effect of women client of
MFI
The study revealed that the factors considered by microfinance Institution to grant loan to
women owned micro-enterprises were ; Bank records, capacity to repay loan, capital invested on
business, financial statement, collateral, outing report and few aspect on Business plan for
women owned micro-enterprises to be granted loan..
It was discovered that microcredit appears to have had positive effects on women owned
microenterprise revenue due to the following that most women micro entrepreneurs under study
performed the following; Hired more workers and invested in a new business, Improved product
quality, Bought stock in bulk, Purchased small tools, Purchased bigger working tools, added new
products, Developed a new business, Purchased transport facilities, and Sold in new markets.
Despite of these effects the study revealed that women entrepreneurs who want to borrow money
from micro finance faced a major significant challenges w such has; paper work, lack of Training
to SMEs, high interest rate, Loan processing duration, collateral requirements and business
plan.
The researcher concluded that microcredit appears to have positive effect on women owned
microenterprises. The evidence suggests that by including these relatively small loans into their
financial management practices, clients can consistently improve enterprise performance and
increase welfare. The positive effects of microcredit appear to extend from personal to family
level and society in General.
The researcher Recommended for further Improvement in the following areas; Micro-finance
policy, Regulatory and other statutory bodies to monitor the interest rates on loans also the
repayment period should include a grace period and reasonable schedule instead of weekly
payment that is commonly found amongst the micro-finance banks. Furthermore the researcher
recommended areas for further research as; that the study to be undertaken in other part of
Tanzania to test the validity and reliability and further studies in broader groups of MFIs’ clients,