Factors affecting the sustainability of group-based loan programmes from the Youth Development Fund in Ilemela District, Tanzania

Dorice Festo; Sadiki Sumawe

doi:10.51867/AQSSR.3.1.18

Authors

Dorice Festo Tanzania Institute of Accountancy (TIA), Tanzania Translator https://orcid.org/0009-0006-6173-7171
Sadiki Sumawe Tanzania Institute of Accountancy (TIA), Tanzania Author https://orcid.org/0009-0002-8630-1631

DOI:

https://doi.org/10.51867/AQSSR.3.1.18

Keywords:

Group-Based Loan Programmes, Sustainability, Youth Development Fund, Tanzania

Abstract

Tanzania's government set up a way for young people to ask for financial help through group-based loan programs in order to boost socioeconomic development. In spite of this, these projects face many problems on their way to their goal. As a result, this study looked into the factors that affect how long group-based loan programs at Ilemela District can last. The goal of the study was to find out how group relations, financial knowledge, and risk management affect the long-term viability of loan programs for groups. In order to reach these goals, the study was based on the theory of planned behavior. A hybrid approach and the constructivism research theory were used in the study, which used a convergent parallel design. A simple random sampling method was used to get 134 young people to fill out surveys, and 8 were chosen at random to be interviewed. The quantitative data analysis was done with SPSS, and the factors of the study were evaluated using the linear regression model. Thematic analysis was used to look at qualitative data. The results show that group dynamics, financial literacy, and risk management strategies all had a positive effect on the long-term success of the group-based loan plan at Ilemela District. All of these factors were statistically significant. Financial knowledge was found to have the biggest effect on the long-term success of group-based loan programs. It was also the most important of the three factors. The researcher found out that the government and other interested parties should set up the right checks to make sure that borrowers understand money before giving them loans. The study also shows that the problems of financial literacy, group dynamics, and risk management that come with group-based loan programs should be fixed by carefully screening the people who want to borrow money and giving the groups that will be receiving loans more tools to help them succeed.

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