ABSTRACT

Challenges faced by credit officers on credit provision in village banking from FINCA Microfinance Bank was considered. FINCA Microfinance Bank in Mwanza city branch was specifically used for the case study. The study has three specific objectives, namely; to examine procedures and process involved in providing the loan, to identify types of business financed by FINCA in the study area and finally to Identify factors contributing to loan provision. The study employed both quantitative and qualitative as research approaches and descriptive research design. The sample size was 138, and this included the Loan Officers and Village bankers. The study used purposive sampling to select 26 loan officers from FINCA Microfinance Bank and simple random were used to select the 123 village bankers. The methods used to collect data from respondents are questionnaires and interview.

The findings of the study revealed that, credit officers are not self-regulating in financial matters in loans provision to their clients from financial institutions in Tanzania as a result for the target given from supervisors in loans provision is becoming lower, although they tried according to their efforts but the number of clients and amounts borrowed were still small.

However, processes and procedures have been the other reason for credit officers on loans provision in FINCA at Mwanza branch, simply because there some processes and procedures of loans which finds that, it is difficult to the other people to get a loans or to borrow money because of the inferiority value of the assets owned by the clients who needs to borrow money. Therefore, credit officers leads to the working below target that given by their supervisors, so due to all these factors make them in such situation. From the findings, it was recommended that the Banks and other Microfinance Institution should have another way of rethinking about processes and procedures encountering the societies on the importance of having loans.

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