September 11, 2011
 
As part of an ongoing effort to fully migrate risk ratings to our new and enhanced risk rating system, Kiva has conducted a re-assessment of the level of risk posed by this institution.
 
During this re-assessment, our analysts were able to gather updated operational and financial information about the institution, as well as speak with key members of the staff. 
 
The information gathered during this process, together with the Kiva's new risk rating system and half-star support, has led us to revise Tujijenge Tanzania's risk rating from 4 to 3 stars. The analysts have found that Tujijenge Tanzania's risk variables, reviewed in the new risk rating model, were most representative of a 3-Star rating.
 
We have prepared a blog post with more information on Kiva's new and enhanced risk rating system, along with a chart showing the relative magnitude of the overall changes for Kiva's portfolio.  To view that, please go here: http://www.kiva.org/updates/kiva/2011/09/07/kiva-risk-ratings-now-with-half-stars.html.
 
Tujijenge Tanzania has been informed of our analysts’ findings and their corresponding change in rating.
 
Original Partner Description

Tujijenge Tanzania is a micro-finance company limited by shares based in Dar es Salaam, Tanzania. It started its operations in July 2006. Tujijenge Tanzania aims at providing micro-financial services including credit, savings, life and medical insurance. In the first three years of operation Tujijenge Tanzania will concentrate in Dar-es-Salaam area, however, the organization intends to expand its operations to other parts of the country as well as in the rural areas.

Tujijenge Tanzania customers are both men and women who are actively engaged in small businesses such as cooked food, second-hand clothing, cereals, charcoal and other petty trade activities. Other businesses include shops, stationery, kiosks, trans-border businesses and hair salons. These micro entrepreneurs operate in the markets, at business centres and some of them conduct the businesses at home. Tujijenge Tanzania Loan Officers, who are currently thirteen (13) in number, would normally go out to the community and talk about Tujijenge Tanzania’s methodology and the intention of giving out loans. Interested business people will form groups of 15-35 members and thereafter they will receive training from the Loan Officer for a period of four (4) weeks. During the training period the potential members will be exposed to the company’s lending methodology, basic topics on loan use and business plan. Furthermore the groups will choose a name for the group, elect leaders, formulate group by-laws, and open a bank account with a commercial bank.

Another requirement before a group can receive loans from Tujijenge is the ability to save; members are required to save 20% of the expected amount of loan during the training sessions. The rationale behind this is to build a discipline of making weekly repayments including saving right from the beginning. Furthermore, if a member can save before receiving a loan this depicts that a person is engaged in a serious business which can generate some amount of money to put aside as savings. In addition, after receiving a loan, members continue to save at least 1000 shillings every week they meet for repayment.

After four weeks of training, the group is ready to receive a loan from Tujijenge. The Loan Officer will forward application forms to the office which includes signatures of all members in the group as a request for a loan. The group will meet every week to make repayments at a designated venue in the communities. During these meetings members are encouraged to exchange ideas on business issues and life in general.

Tujijenge Tanzania desires to reach out to micro entrepreneurs and provide them with financial and social intermediation services since capital is one of the major barriers to development and success for micro-enterprises initiatives in Tanzania. Due to the small sizes of the businesses, and the lack of resources available to micro enterprises, micro entrepreneurs need micro-financial services in order to survive and grow their businesses. However, due to insufficient mechanisms and inadequate information in Tanzania on credit markets, commercial banks are discouraged from and are unwilling to lend to micro-enterprises.

Repayment Performance on Kiva

    This Field Partner All Kiva Partners
  Start Date On Kiva Nov 7, 2007 Oct 12, 2005
Total Loans $8,537,925 $586,524,650
Amount of raised Inactive loans $0 $575,375
Number of raised Inactive loans 0 493
Amount of Paying Back Loans $1,406,700 $119,938,425
Number of Paying Back Loans 613 126,745
Amount of Ended Loans $7,131,225 $466,010,850
Number of Ended Loans 2,248 592,750
Delinquency Rate 1.25% 3.39%
Amount in Arrears $8,986 $2,666,127
Outstanding Portfolio $718,275 $78,651,892
Number of loanDelinquent 40 10,408
Default Rate 0.21% 1.15%
Amount of Ended Loans Defaulted $15,098 $5,337,667
Amount of Ended Loans $7,131,225 $466,010,850
Number of Ended Loans Defaulted 36 16,806
Currency Exchange Loss Rate 0.00% 0.08%
Amount of Currency Exchange Loss $0 $480,684
Refund Rate 0.31% 0.77%
Amount of Refunded Loans $26,775 $4,496,250
Number of Refunded Loans 11 5,040

Loan Characteristics On Kiva

    This Field Partner All Kiva Partners
  Loans to Women Borrowers 72.27% 74.17%
Average Loan Size $280 $418
Average Individual Loan Size $644 $656
Average Group Loan Size $3,035 $1,827
Average number of borrowers per group 10.9 8
Average GDP per capita (PPP) in local country $1,700 $3,433
Average Loan Size / GDP per capita (PPP) 16.45% 12.19%
Average Time to Fund a Loan 6.56 days 5.58 days
Average Dollars Raised Per Day Per Loan $42.60 $75.01
  Average Loan Term 4.62 months 10.31 months

Journaling Performance on Kiva

    This Field Partner All Kiva Partners
  Total Journals 1,952 292,969
  Journaling Rate 80.90% 42.41%
  Average Number of Comments Per Journal 0.17 0.08
  Average Number of Recommendations Per Journal 3.88 1.89

Borrowing Cost Comparison (based on 2013 data)

    This Field Partner Median for MFI's in Country All Kiva Partners
  Average Cost to Borrower 77% PY 21.00% PY 33.64% PY
  Profitability (return on assets) 4.7% 0.2% -1.40%
  Average Loan Size (% of per capita income) N/A 134.00% 41.35%

Country Fast Facts

Field Partner Staff

John Benbela
Felistas Coutinho
Boniface Gwesso
Emmanuel Hamaro
Yessaya Adolph Lyimo
Shafi Nambobi
Michael Ntobi
Rita Nyaborogo
Marion Walls