Exploring Loan Conditions and Timely Loan Repayment among Women Entrepreneurs in Ilala Municipality, Tanzania

Abstract

This study examined how loan conditions influence timely repayment among women entrepreneurs benefiting from the 4% local government loan scheme in Ilala Municipality, Tanzania. Despite government efforts to promote women’s economic empowerment through interest-free loans, timely repayment remains a challenge. A qualitative approach was used to explore the experiences and perceptions of women entrepreneurs. Data were collected through in-depth interviews with women entrepreneurs and Community Development Officers from Kariakoo, Buguruni, and Tabata wards and analysed thematically. The findings reveal that interest-free loans, flexible repayment periods, and group-based lending determine timely repayment. The absence of interest reduces financial pressure, while the one-year repayment period alignes with business production and marketing cycles. However, small loan sizes limits business growth and cash flow, reducing borrowers’ repayment capacity. Group lending promotes accountability through peer monitoring and social pressure, although weak leadership and poor group management undermines its effectiveness. The study concludes that appropriate loan conditions are essential for timely repayment. It recommends reviewing loan sizes to reflect business needs, training group leaders in financial management, record-keeping, loan monitoring, and conflict resolution, and strengthening loan monitoring through public-private partnerships with financial institutions.

Issue Section: Entrepreneurship