Microfinance in Tanzania: An Emerging Sector Says Altemius Millinga of Yetu Microfinance

Altemius Millinga, Managing Director of Yetu Microfinance Bank PLC, a bank specialized in providing financial services, loans, savings products, money transfer and payments to the lower end of the market of the financial sector spectrum, shares his assessment of the microfinance sector in Tanzania.

“At Yetu Microfinance, our core business is providing financial services, loans, savings products, money transfer and payments to the lower end of the market of the financial sector spectrum. So, basically, we are a specialized bank. There are four of us in the market which specialize in microfinance. The market still remains under served because the lower end market of any business component here is very big”, says Altemius Millinga.

“Microfinance in Tanzania is an emerging sector. In the 90s, the economy was opening up and the banking sector was undergoing structural changes. Before 1991, banking was dominated mainly by the government. So, when the banks were licensed, what happened initially was that many people did not have bank accounts. That is how microfinance emerged as a new alternative for those who are not able to access banking services. We operated outside the legal framework until 2000, when the microfinance regulations were put into place. But currently, with the new government, we have a new microfinance law in place. That means microfinance is now able to attract local and foreign investors because we have microfinance law, which was approved by the Parliament in 2018. With microfinance regulations, there are four categories or tiers. We have microfinance, which is done by commercial banks, microfinance led by microfinance banks, then you have savings and credit cooperatives, and finally you have informal groups. But there is always a linkage between the two because SACCOs (savings and credit cooperative organizations) and microfinance informal groups depend on the banks for other services”, he adds.

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