The Effectiveness of the Group lending Model for Financing Micro and Small Enterprises in Tanzania

Obed Hugh Ligate


Micro, Small to Medium Enterprises (MSMEs) are widely acknowledged to contribute significantly to economic growth in developing countries for instance, (Ayyagari, Beck and Kunt, 2007) put the average share of MSMEs that have up to 250 employees as 54% of the formal employment and 26% of the Gross Domestic Product(GDP) in a analysis that spans 76 countries. Amongst barriers to the development of MSMEs in Tanzania was lack of access of capital due to lack of repayment culture, no credit history and effective business plans to secure loans.

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