The CRDB Bank, 90 per cent owned by DANIDA (the government still holds 10
per cent of the shares) provides both wholesale and retail lending services. Reportedly, it has a 40 per cent share of the micro-finance market, with centralized lending provided through their 24 branches.
For the first three quarters of 2003, CRDB statistics on micro-finance activities indicate that women made up about 41 per cent of their members, and received 47 per cent of their loans (loans to female clients, see Table 7).34 During the period, male members received an average of 2.12 loans and women members received an average of 2.54 loans. There is no indication of the distribution between women and men of the Tshs 25.6 billion in total loan disbursements.
Since 2002, the Bank has been piloting the SACCO concept (Savings and Credit Cooperative Society) in four regions of the country as a way of group-lending to MSEs.
Under this system, the CRDB Bank lends to wholesalers, who in turn deliver microfinance products through the SACCOs. To participate as a SACCO, groups of MSEs must form and register themselves. Each individual member must agree to buy shares in the SACCO, which makes them eligible to borrow at a 1:3 ratio depending on the number of shares they have. Members must also contribute 25 per cent of the loan amount as security-on-deposit with the CRDB. The wholesaler borrows from the CRDB at 12.5 per cent and lends out to SACCOs at 24 per cent (2 per cent per month). It appears that only one of the SACCOs is for women only.
A survey of 125 SACCOs undertaken by the CRDB Bank recently found only 25 operating on a “best practice” basis, the top performing of which was the women’s SACCO. One of the other findings was that for mixed group SACCOs, women borrowers had lower default rates than men, a finding consistent with other studies of micro-finance lenders. The Bank delivers three levels of training to SACCOs – to all of their members, to their professional staff, and to their management committees. The intent of the Bank is to roll the SACCO model out across the country. The CRDB aims to become a retail bank within the next five years. Within this context, funding SACCOs is an approach for the Bank to reach MSEs that have the potential to become individual loan clients.
On the individual lending side, the Bank prefers to provide loans of over TShs 2 million. Their normal collateral security requirement is 154 per cent of the loan amount.35 For loans over TShs 20 million, the client has to have a professional business plan. The Bank key informant stated that the number of women clients in this larger loan category is very low, adding that most MSE sector women are not encouraged to go to banks because they do not have a track record and are unable to meet collateral requirements. A serious encumbrance is women’s lack of property ownership, and the reluctance of many husbands to give consent to their wives to pledge matrimonial property against an enterprise loan.
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