Role of Commercial Banks in Poverty Aleviation in Tanzania
CHAPTER ONE
1.0 INTRODUCTION
According to the World Bank reports about 1.1 billion people live in extreme poverty for less than US$ 1. The extreme poverty being in the developing countries of which 9% are from East Asia and the Pacific and 41% are from Sub-Saharan Africa. Tanzania remains one of the 10 poorest countries in the world. Poverty remains widespread and deep, with half of Tanzanians living under conditions of deprivation, concentrated in the rural areas.
Commercial Banks contribute to economic growth through their financial intermediation role. Banking sector in Tanzania has experienced fundamental changes over the last decade following banks and other financial institutions reforms starting from the early 1990s. However, what is still concealed is the extent to which banks are efficient in Tanzania. The impact of commercial bank finance in the economic growth and development of a state cannot be overemphasized this is not a new concept.
One of the core businesses in financial institution particularly commercial banks is lending to help business people get rid of poverty. According to Muktar (2009), credit has been recognized as an essential tool for promoting small entrepreneurs .
The government encourages commercial banks to lend the fund to individuals to extend their projects (businesses) to a level until they are able to reduce the level of poverty and have their basic needs.
1. BACKGROUND OF THE PROBLEM.
Commercial banks can be a critical element of an effective poverty reduction strategy. Improved access and efficient provision of savings, credit, and insurance facilities in particular can enable the poor to smooth their consumption, manage their risks better, gradually build their asset base, develop their micro enterprises, enhance their income earning capacity, and enjoy an improved quality of life. The issue of commercial banks to the Tanzanian economy has been of great importance. The role of Commercial banks have had
1.0 INTRODUCTION
According to the World Bank reports about 1.1 billion people live in extreme poverty for less than US$ 1. The extreme poverty being in the developing countries of which 9% are from East Asia and the Pacific and 41% are from Sub-Saharan Africa. Tanzania remains one of the 10 poorest countries in the world. Poverty remains widespread and deep, with half of Tanzanians living under conditions of deprivation, concentrated in the rural areas.
Commercial Banks contribute to economic growth through their financial intermediation role. Banking sector in Tanzania has experienced fundamental changes over the last decade following banks and other financial institutions reforms starting from the early 1990s. However, what is still concealed is the extent to which banks are efficient in Tanzania. The impact of commercial bank finance in the economic growth and development of a state cannot be overemphasized this is not a new concept.
One of the core businesses in financial institution particularly commercial banks is lending to help business people get rid of poverty. According to Muktar (2009), credit has been recognized as an essential tool for promoting small entrepreneurs .
The government encourages commercial banks to lend the fund to individuals to extend their projects (businesses) to a level until they are able to reduce the level of poverty and have their basic needs.
1. BACKGROUND OF THE PROBLEM.
Commercial banks can be a critical element of an effective poverty reduction strategy. Improved access and efficient provision of savings, credit, and insurance facilities in particular can enable the poor to smooth their consumption, manage their risks better, gradually build their asset base, develop their micro enterprises, enhance their income earning capacity, and enjoy an improved quality of life. The issue of commercial banks to the Tanzanian economy has been of great importance. The role of Commercial banks have had
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