Aga Khan Agency for Microfinance

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Microfinance in Tanzania and Zanzibar

Microfinance activities in Zanzibar will be closely linked to AKTC’s conservation programme in the historic Stone Town. The programme will include housing rehabilitation and business development services in and around the restoration of the Stone town. These loans will work to reduce poverty by supporting local ownership, stimulating the development of tourism and ensuring sustainability of the rehabilitation programme. In addition, the microcredit activities will aim at supporting civil society institutions, help communities to expand agricultural and fishing activities, build schools and address other social challenges.

In 2005, AKAM commenced microcredit operations in mainland Tanzania in the Mtwara and Lindi regions, which are classified as among the most marginalised areas of the country. Mtwara is one of the most poverty-stricken of the 20 regions on mainland Tanzania and borders the even poorer Mozambique province of Cabo Delgado, where AKAM also operates microcredit activities. This programme offers working capital loans for the establishment and expansion of micro and small retail and commercial enterprises in the urban centres and agriculture loans in the rural areas. Within two months of its operations, the programme had disbursed 16 group loans with 50 beneficiaries in Masasi District amounting to US$ 15,223.

A significant scaling up of the programme activities is envisaged in 2006 with special emphasis placed on achieving management synergies and operational efficiencies through linkages with the other AKAM programmes in East Africa.

AKAM worldwide
AKAM’s microfinance initiatives range from village lending cooperatives to self-standing microfinance institutions to full-fledged microfinance banks. These activities currently operate in Afghanistan, Burkina Faso, Egypt, India, Kazakhstan, Kenya, Kyrgyz Republic, Madagascar, Mali, Mozambique, Pakistan, Syria, Tajikistan, Tanzania, and Zanzibar. Often they are part of wider integrated development strategy being implemented by the AKDN within each country. In addition to providing financial services to the poor, they may include business or technical advisory/training extension services and business development programmes that work directly with local entrepreneurs.