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Microfinance benefits the local community in Tanzania

microfinance

Our approach is best demonstrated by the impact that one of our microfinance deals in Tanzania had on the local community.

PRIDE Tanzania is one of our partner microfinance clients in Tanzania. We provide term loans and overdraft facilities as well as transaction banking services to PRIDE, which over the past five years have amounted to $7 million. Our funding helps PRIDE to support its microfinance clients providing them with micro loans and business development services.

The positive impact of our relationship with PRIDE Tanzania is best illustrated by the story of one of their clients, Modesta Luka Mwangata. She became a financially independent and successful businesswoman after receiving microfinance loan funding from PRIDE Tanzania. Her story is unique because Modesta is deaf.

Modesta's road to success was not easy. She says, 'I was abandoned by my parents because of my situation.' Brought up by her aunt, Modesta was educated to primary school level and, on leaving, was introduced to the Tanzania Society for the Deaf. The society taught her the basics of business, which has stood her in good stead.

Modesta learned about the services offered by PRIDE Tanzania from members of her church. The microfinance institution first offered her a loan of TZS50,000 (equivalent to $40) to launch a business as a food vendor. On paying back the loan, Modesta borrowed TZS150,000 to start a new business selling clothes. When that loan was repaid, PRIDE Tanzania offered her TZS500,000 to improve her business and start a timber stall. A further TZS1 million loan allowed Modesta to start a furniture workshop at Mwenge in Dar es Salaam, Tanzania's largest city.

Modesta is now one of the premium customers at PRIDE's branch in Magomeni, servicing a TZS2 million ($1,600) loan. Her success has allowed her to take care of her child, and help other deaf people understand how microfinance loans provide economic empowerment. In accessing the financial system, Modesta has been able to improve the well-being of her family and, as she is quoted saying, is 'now a respected woman' in the community.

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Annual Report and Accounts 2009