On February 28th 2017, the third National Forum on Linking Informal Savings Groups to Formal Finance will be held in Dar es Salaam. Let’s review what it is exactly about.

LinkUP: what is it?

The National Forum on Linking Informal Savings Groups to Formal Finance is part of CARE International Tanzania’s LinkUP project. LinkUP aims at training Village Savings and Loans Associations (VSLAs), and giving them the opportunity for financial inclusion. Indeed, the low and unpredictable income of poor people makes it difficult for them to bank with formal financial institutions. CARE has found that joining informal savings groups does not only provide valuable financial services to the ultra-poor, but can also provide an opportunity for formal financial inclusion. To date, more than 7000 groups have already linked with one of CARE’s bank partners; for many of their members, it has been the first formal bank account they have ever known.

The LinkUP National Forum

As part of LinkUP Project, the National Forum brings together stakeholders from across the financial services sector to share experiences and concerns about scaling up financial services for unbanked groups and their members. Through these discussions, the National Forum aims to:

  • Create a space for information sharing and agenda setting among key market actors
  • Enhance collaboration and unity in the promotion of financial inclusion for savings groups
  • Gather stakeholder input on barriers to scaling up financial services for savings groups
  • Build stakeholder understanding of savings groups as clients and what works in serving them

The first two Forums

The third Forum is taking place after the success of the last two forums, held on October 8th 2015 and April 21st 2016. The first was focusing on the demand side (costumers) and aimed to understand unlinked groups’ concerns, since only 19% Tanzanian people have a formal financial account. For groups which decided to link, the main reason was safety and security; for those which did not, it was mainly because of transaction charges, trust issues and unsuitable banking products. The second Forum was dealing with the supply side’s concerns but also showed the many advantages that banks could have if they were more inclusive.

Focus of the third Forum

After analyzing both demand’s and supply’s concerns, the third Forum will focus on the relationship between regulation and the opportunities for informal savings groups to access formal financial services. CARE and financial Institutions are aiming at scaling-up their work by achieving a more supportive environment for banking linkage, specifically through favorable legal framework and policies. After a speech of our guest of honor Dr. Ashatu K. Kijaji, Deputy Minister for Finance and Planning in Tanzania, the forum will be the opportunity to discuss the impact of Tanzanian Policy Framework on financial inclusion for informal saving groups.

Where: Serena Hotel Courtyard, Dar es Salaam

When: 28th February 2017 from 10:00 AM – 1:00 PM

 For more information on the National Forum, contact This email address is being protected from spambots. You need JavaScript enabled to view it., Link UP Coordinator.

Farmers’ Fight bears Fruit Villagers in Mbarali entered 10 years ago into a land dispute with Kapunga Rice Project Limited. The dispute started when the investor grabbed the land of the village, inhabited by over 4,500 people. In 1995 villagers provided 5,500 acres of land to the National Agricultural and Food Corporation (NAFCO) for special rice production. In 2006, NAFCO handed over to Kapunga Project Limited, and to every one’s surprise, the title deed showed 7,370 acres of land instead of the 5,500 agreed by the villagers. This meant that hundreds of villagers on the land that was now given as a bonus to the investor.

The conflict grew from a local conflict to the national spotlight. The then Minister of land Professor Tibaijuka tried to resolve the conflict but with no success. By that time the Journalists Environment Association (JET), currently one of AYP’s partners, became aware of the issue and started training local CBOs and other groups on their land rights. JET also used its network of journalists to explain the conflict to the general public, stating that this was a clear case of land grabbing by investors and misuse of public powers by the government officials in the region. Last year 2015, AYP team and JET visited Mbarali, listening to the same frustrations as the dispute remained unresolved. We said we would stand by the farmers! During the gender festival in September 2015 we managed to have the issue covered by national media. A break through! Late 2015, the Minister of land William Lukuvi announced that the 1,870 acres of land taken from the villagers will be given back to the villagers. In January 2016 the president revoked the title deed and the 1,780 acres were given back to the villagers.

For AYP and partners, this is a victory and an indicator that advocacy works, even though it took 10 years to see victory. But the victory is not yet complete. Some of the farmers’ assets were destroyed by the investor and they are seeking compensation. Also for this we will be stand by! Kapunga gives us hope that other conflicts can also be resolved favorably, such as those in Kilosa, Mvumero, and other places. We just need to be strong and ensure that farmers can invoke their rights.

The team: Nashmeen Mosselhudin, Samantha Jenkins, Dharna Obermaier and Allison Price have documented their time in Tanzania.


With inputs from CARE Tanzania, the government has completed a new microfinance policy, which will regulate the work of Non-Financial Institutions (NFIs). The completion of the policy was announced by the Principal Economist of the Ministry of Finance and Planning Ms. Dionisia Mjema during CARE’s Microlead Regional workshop at Uhuru Hotel in Moshi on 19th April. The revised policy has been approved by the Cabinet now awaiting approval from the President. The policy puts special emphasis on the promotion of financial inclusion through usage of technology. VSLAs and other Savings groups will now be regulated by the Local Government Authorities, while SACCOS initiatives will be registered, licensed and regulated by the Tanzania Cooperative Development Commission. The community Banks and other Financial Institutions will be licensed and regulated by the Bank of Tanzania.

Inputs provided by CARE

CARE in Tanzania was among the key stakeholders reviewed the draft policy. We submitted our written comments to the Ministry highlighting the following key issues:

  •         The need for parameters that will guide product diversification specifically for targeting low income and rural market segments;
  • The need for an inclusive economic growth mechanisms taking into consideration the needs of different people;
  • Linkages should be promoted to include benefits such as improving a saving culture and security;
  • VSLAs should be considered to be exempted from taxation;
  • Gender analysis is required to determine gender specific needs to be addressed by the policy

While the announcement of the new policy was one of the highlights of the Microlead event, there were also introductions of new products by by Mwanga Community Bank and NMB, debates on the advantages and disadvantages of the franchisee model with recommendations for remedial measures and a discussion about how to ensure a healthy competition among banks which will lead to product improvement.

The Regional Microlead workshop was attended by UNCDF (the donor), Franchisees, CBTs, Community and national Banks, CSOs, representatives from the (Central and Local) Government, including the Bank of Tanzania.

A similar event was organized by CARE’s Link-up program for a slightly different audience in Dar Es Salaam. A review of the newly proposed microfinance policy was also an agenda item here.

Poverty reduction through financial inclusion: Quick stats: Tanzania’s mobile phone penetration is among the highest in Africa and the country is currently enjoying a robust financial sector growth. Yet, as of 2013, although 90% of Tanzanians were accessing mobile money services, the percent of adults with an account at a formal financial institution is just 17% nationally and just 14% in rural areas (Sources: GSMA Tanzania Enabling Mobile Money Policies; Findex Tanzania 2011). With a national commitment to reaching 50% formal financial inclusion by 2016, the  time is right for formal banking to catch up to the mobile money sector.

Link UP Programme: CARE Tanzania and NMB Bank are teaming up to build replicable models for financial inclusion for rural communities. The initiative provides opportunities for village savings and loans societies (VSLA) members to access formal financial services via linkages to financial service providers through the introduction and expansion of technology-enabled financial services. The initiative aims to reach 250,000 VSLA members for group linkages and 70,000 members for individual linkages. As VSLA groups mature, many seek the security of a bank account to hold their growing savings, or are in need of larger loans than the group can provide. In order to ensure that the VSLAs and its members understand financial management and the linkage with the formal sector, CARE Tanzania aims to build the capacity of the VSLAs and its members before any formal linkage occurs.