Abstract
The Effects of Credit Collection Policy on Portfolio at Risk of Microfinance Institutions in Tanzania
Highlights
Microfinance institutions are proven to have significant contribution in reducing poverty among the low-income earners and disadvantaged individuals in society
It intends to fill that gap by providing further insight and information on the role of microfinance credit collection policy on portfolio risk management in Tanzania. 2.0 Materials and Methods The design adopted for this study was a cross-sectional survey method, which enabled undertaking of both quantitative and qualitative data from study participants
This study aimed to determine the effect of credit collection policy on portfolio at risk of microfinance institutions in Tanzania
Summary
Microfinance institutions are proven to have significant contribution in reducing poverty among the low-income earners and disadvantaged individuals in society. Microfinance institution need to manage portfolio quality against delinquency and defaults, by establishing effective strategies in the lending and collection processes. Some determinants are significant to only set of MFIs. Empirical evidences from the findings by Kar & Swain, (2014); Adongo and Stork, (2000); Nyamsogoro, (2010) and Zohair, (2013) reported that interest rates, loan sizes and loan duration influence financial sustainability and portfolio performance of microfinance institutions. Some past studies have dwelt on member-based microfinance institutions while other studies focused on only one microfinance programme They have been inefficient in establishing the factors contributing to effective credit collection policy on portfolio at risk of microfinance institutions in Tanzania.
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