Supporting Tanzania's Business Women
by IPS Correspondence - Paul Chintowa

Dar es Salaam - Women in Tanzania, as in the rest of Africa, are the backbone of rural communities. They work the fields and maintain the home - and get scant reward. Now a scheme is attempting to help them plough some of the little money they have saved into income-generating projects. The idea is simple - to support credit schemes among women cooperative members.

Women, who make up more than half of the country's population of 28 million people, find the first hurdle to setting up a business is access to credit. Getting a loan from a commercial bank is a nightmare of form-filling and intrusive questioning.

"One has to have collateral before he or she gets a loan" explains Laura Maro, a widow and mother of three children benefiting from a programme tailored by the International Co-operative Alliance (ICA). Maro is among 30,000 women in TanzaniaUs northern region of Kilimanjaro who are being helped by the ICA to set up savings and credit associations to raise capital for their businesses.

The ICA offers training in book-keeping and savings and credit management for women in cooperative development, the ICAUs priority area. Maro and her 50 colleagues contributed a total of 200,000 shillings (about 400 dollars) two years ago to form the Masasa' women's credit association.

"The money we contributed acted as shares. Each member is allowed to borrow not more than half of what she has contributed" she adds. "I had to repay the loan with an interest rate of only two percent and I am very happy that I have repaid my loan" says Maro, now a tailor in Moshi, a town on the slopes of Kilimanjaro, Africa's highest mountain. Commercial banks, unlike the savings and credit associations, charge interest rates of up to 30 percent on their loans, far too much for rural-based customers.

"Women can work and improve their lives if they are helped on how to go about setting up the associations" says the ICAUs project manager for Eastern and Southern Africa, Labourn Minishi. "Our aim is to give women an orientation so that they can run their work efficiently without problems. We visit them regularly to see their performance" he adds.

The ICA is a non-profit making organisation founded in 1895 with the aim of uniting, representing and serving cooperatives in the world. The regional work of ICA includes research and planning and the regional offices and project offices act as consultants in co-operative development in the different regions. Other credit associations helped by the ICA in Tanzania are among subsistence coffee and maize growers who use their loans to buy fertiliser, pesticides and to make improvements to their farms. Coffee is a leading export crop for Tanzania and earns the country some 100 million dollars each year. Agriculture remains Tanzania's main economic activity, contributing 50 percent of GDP and representing 70 percent of the country's hard currency earnings.

Growing unemployment is a serious headache for the authorities. Job creation in the formal sector has dwindled from 30,000 a year in the 1970s to a current low of 9,000. On-going donor-backed economic reforms have resulted in 50,000 public service workers being laid off in the past few years as the government attempts to cut its spending. In addition, the army of unemployed is increasing with 600,000 school drop-outs annually who join the jobless queue.

A labour force survey conducted in 1991 showed that nearly 2.4 million Tanzanians are engaged in the informal sector. This represents about 22 percent of the total employed. The majority of informal sector workers are based in rural areas engaged in activities such as fishing, quarrying and charcoal making. In the towns they are artisans. Their numbers are almost certainly now far more than the four-year-old labour survey first revealed. The government has ignored the importance of developing this part of the economy. Tanzania had run a heavily state-regulated system which had virtually guaranteed employment in the public sector until a U-turn in the late 1980s provoked by an economy on the verge of collapse. The ICA credit scheme is attempting to provide support to small-scale businesses struggling to get a foot-hold in the market.

The International Co-operative Alliance (ICA) can be contacted via email at -

Hari Srinivas -
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