The Importance of Justice and Equity for Marginalized Communities
For many people living in rural areas of Tanzania, access to financial services is limited. This lack of access can make it difficult to start or grow a business, which can in turn lead to poverty and marginalization. This is where microfinance comes in.
Microfinance is the provision of financial services to people who are traditionally considered “unbankable” by the formal banking sector. This includes small business owners, women, pastoralists, and others who may not have the collateral or income required for a traditional bank loan.
Engishon Microfinance Limited is a social enterprise that is working to improve the quality of life for pastoralist communities in Tanzania through the provision of innovative, inclusive, and affordable financial services. We serve indigenous peoples in Ngorongoro, Longido, and Monduli districts in Arusha Region, a region covering 28,337 square kilometres with a population of over 450,000 people living in 180 remote rural villages.
The served communities have traditionally been marginalized from the formal financial systems for being ‘uneconomical to serve and/or too difficult to reach.’ The financial exclusion, combined with adverse climate conditions, cultural marginalization of women, and inflexible dependency on livestock keeping as the economic mainstay, has entrenched the indignity suffered by these vulnerable communities for generations.
The Need for Microfinance in Tanzania
Microfinance institutions like Engishon are working to change this by providing access to financial services for those who need it most. This includes small loans, savings accounts, insurance products, and other financial services that can help people start or grow a business and improve their quality of life.
One of the biggest challenges facing microfinance institutions is reaching rural communities. This is often due to the lack of infrastructure in these areas, making it difficult and expensive to provide services. Engishon uses a mobile banking platform that allows us to reach even the most remote villages in our service area. This platform enables our customers to perform transactions anywhere there is mobile phone coverage – which is nearly everywhere in Tanzania.
Another challenge facing microfinance institutions is sustainability. In order for microfinance to be successful in the long term, it must be financially sustainable so that it can continue to provide services to those who need it. Engishon achieves sustainability through a combination of grants, commercial loans, and revenue from our products and services. We also reinvest our profits into our operations so that we can continue to serve our clients effectively.
Microfinance plays an important role in development by providing access to financial services for those who are traditionally considered “unbankable.” This includes small business owners, women, pastoralists, and others who may not have the collateral or income required for a traditional bank loan. However, microfinance institutions face many challenges including reaching rural communities and achieving sustainability. Engishon Microfinance Limited is a social enterprise working to overcome these challenges so that we can provide access to financial services for all members of society regardless of their location or economic status.
