The impact of Microfinance Loans Institutions in alleviation of poverty in Tanzania Rural Areas: A Case Study of Rungwe District, Mbeya Region

The study aimed to investigate the impact of microfinance institutions‟ loans in alleviation of poverty in Tanzania rural areas by taking PRIDE Tanzania LTD in Rungwe district as the case of the study. The study specifically assessed how clients of PRIDE in Rungwe district have improved their livelihood through loans. In determining the degree improvements, the researcher investigated the extent of business growth and ability to meet personal basic needs. In the analysis both primary and secondary data were used. Quantitative methods were also employed in the performance assessment. Primary data was collected using self-administered open and closed ended questionnaires. The study also investigated the challenges encountered by most of the borrowers during and after receiving their loans and suggests possible solutions. However the findings from the study shows that individuals who got loans and invest in SMEs, have improved their life style significantly by being able to build or renovate houses, buying land, buying modern households, afford to pay school fees for their children, medical expenses, and winning social recognition. It is therefore recommended that the Micro-finance institutions and SME sector have to be given much emphasis by the government as it plays a major role in improving the life of the people as well as contributing much to the Gross Domestic Product (GDP) of the country. The challenges facing the sector especially difficult condition put by financial institutions as requirements for accessing loans have to be re-assessed to attract even the lower income earners