On a crowded street in the Kariakoo District of Dar es Salaam it is easy to overlook the unassuming building that houses PRIDE Tanzania’s local branch. Nestled among endless shops and lost amongst the excitement of the day’s activity, the largest of PRIDE’s 58 branches is modest and nondescript. It isn’t until you step inside the orange stucco walls that you are able to understand what makes this building more remarkable then the rest.
In the branch’s waiting area, you are immediately hit with an atmosphere of activity. Hundreds of Tanzanian entrepreneurs have come for their weekly check-in with one of the country’s most effective and innovative microfinance institutions, PRIDE Tanzania. PRIDE, which stands for Promotion of Rural Initiatives and Development Enterprises Limited, also happens to be supported by a USAID credit guarantee which has helped it maintain and increase microcredit activities.
This particular branch services over 2,000 clients a day, some of whom travel for hours to meet with their lending groups and pay back the next installment of their loans.
As someone lucky enough to engage with these entrepreneurs, I was immediately struck by the drive and charisma with which they approach their businesses (in addition of course to the charm that all Tanzanians naturally possess). While intrigued by their visitor and more than willing to share their stories, they are clearly anxious to complete their meeting and get back to what brought them here in the first place – their businesses.
Just a short distance down the road I was able to visit some of these businesses firsthand, starting at Fatema’s print shop. A client of PRIDE for over six years, Fatema started her business as a one-person operation with a $3,000 loan. Fatema now has four employees, was able to buy a plot of land for her home and can afford to send her children to school. Recently becoming an agent for the popular M-PESA mobile banking service, Fatema’s business continues to grow, as evidenced by the $11,400 loan she recently received.
Deeper into the Kariakoo market, I met Gertrude, the owner of two local clothing and shoe stores. Formerly on her own, Gertrude recently opened her second store, employs four employees and is able to source her products from suppliers throughout the region – greatly reducing her input costs and boosting her profits.
This trend continues for the rest of the afternoon, for Fatema and Gertrude are just two of the thousands of entrepreneurs that PRIDE supports through its micro-loan products.
One of the things that makes PRIDE special is its relationship with USAID’s Development Credit Authority (DCA). DCA uses risk-sharing agreements known as credit guarantees to mobilize local financing in developing countries.
In 2010, PRIDE utilized a guarantee from DCA to support a bond offering, the first of its kind for a microfinance institution in Tanzania. The guaranteed bond enabled PRIDE to raise $10,000,000 from local capital markets. As a result, PRIDE vastly expanded its portfolio and the number of borrowers it supports. This activity is part of a much wider effort by the U.S. Government to stimulate local capital markets in Tanzania.
Meeting these individuals firsthand, both the borrowers and the staff of PRIDE, reinvigorated my drive to provide them with the local capital they desperately need to grow their businesses, provide for their families and develop an economy that is supported entirely by the local community.