In Tanzania, Community Financial Groups (CFGs) are self-help organizations, owned and self managed by members to mobilize their own resources and extend credit to their members. These include Rotating Savings and Credit Associations (ROSCAs), Accumulated Savings and Credit Associations (ASCAs), Village Community Banks (VICOBAs), Village Savings and Loans Associations (VSLAs), etc. Recently, CFGs in Tanzania have attracted attention of investors, policymakers and donors in the financial markets. CFGs contribute significantly in the provision of financial services in Tanzania. In the year 2015 it was estimated that there are over 200,000 CFGs (80% of the members of CFGs are women) with investment capital estimated to reach about 500 billion Tanzania shillings.
CFGs have played a great role in enabling Tanzanians who are not able to access financial services from banks and financial institution to have alternative means of acquiring financial capital for implementing their economic activities. These groups, which have 15 to 30 members are widely spread in the country and have made a significant breakthrough in combating poverty in both urban and rural areas. The National Economic Empowerment Council (NEEC) in collaboration with other stakeholders is working vigorously to improve the operating environment of these groups.
Despite their importance, there is lack of proper coordination and limited information on the existence of community financial groups in Tanzania. Lack of adequate quantitative and qualitative information on CFGs operations and the extent of their access to members in the country limit the ability to design proper interventions for promoting their growth and viability. In addressing this problem, a mechanism for coordination of the CFGs in Tanzania is being set up. In the set up the Local Government Authorities (LGAs) through the District/Town/Municipal/City Councils (LGAs Empowerment Focal Persons) play a significant role in acquiring the needed information /reports on CFGs from their respective areas. In supporting this initiative, guidelines for registration and coordination of CFGs have been developed.
Furthermore, in a bid to assist this sub-sector the NEEC organizes and conduct regular meetings with the CFGs promoters and stakeholders to discuss various issues pertaining to the existence and development of IFGs. This forum provides opportunity for all relevant stakeholders to regularly exchange information and strengthen enabling environment for the operations of CFGs.