Savings and Credit Schemes in East and Southern Africa

The Kinondoni District Credit Scheme in Tanzania is operated by the Presidential Trust Fund for Self Reliance(PTF)and promotes grassroots economic developemt by providing credit, traning and consultancy to the poor who are trying to establish income generating projects.

The target group of the scheme is unemployed women and youth who are mobilised either in groups or individually.

Credit is given only for small scale production oriented projects and the target group must access or create feasible income generating projects before applying for loans.

The PTF credit scheme operates on the Grameen Bank(GB)model and is worked through the formation of groups and a Centre which is the grassroots operating unit.The groups are formed by prospective loanees who organise themselves into units after an initial training which is given prior to the introduction of the loan scheme.

A group consists of five people who share similar economic statusand who are not related to each other. Although the group includes members from a previously identified traget population, the people who organise themselves as a group are carefully screened by project staff. Each potential member’s house is visited by a field project officer who has to ascertain if the member qualifies to join the group.

The group system works in the same way as the GB model in that the group is responsible for every member’s loan. Prior to receiving loans, the group as a whole must undergo a minimum of 7 days compulsory in order to learn the rules and regulations of the credit scheme, to learn how to write and sign one’s name and signature and to receive some general knowledge on credit, savings and the running of a credit scheme.

Once a group is organised, it is recognised and registered by the project staff. Then the group is ready to receive loans for which is must apply.Although the group members receive and are responsible for the loans as one whole unit, the income generating projects are done individually by each member.

The group itself is identified as collateral for every loan taken by each individual member because it must be responsible for every loan taken.