Abstract:
Microfinance Institution (MFI) is an organization that offers finance services to the very poor. MFIs emerged
to serve the financial needs of these poor the community. The main objective of this study was to assess the
perception of MFIs’ clients on loan insurance fund. To meet the study objectives, data was collected from
three branches of PRIDE Tanzania, namely, Kariakoo, Buguruni and Magomeni. Questionnaires were
distributed to PRIDE Tanzania clients as well as officials. Questionnaires were coded into statistical package
known as SPSS and analyzed. Collected data and descriptive analysis was conducted and presented in
tabular formats. Research hypotheses were tested using chi-squire statistics. The study shows that, there are
mixed results on the perception and benefits of LIF to clients. Other perceives LIF is used as collateral
especially when client fails to repay loan, while, others perceived that LIF do not help at all, instead, PRIDE
is benefiting by holding/locking their money during the period of the loan. The study concluded that, MFI
s clients have positive perception about LIF, however, the problem that arises is the way LIF is locked for
certain period as well as delaying in disbursing LIF when loan is fully repaid. The study recommends that
PRIDE Tanzania should train their credit officers about LIF to enable clients to have proper information and
knowledge about LIF and its benefits. Lastly, PRIDE Tanzania should try to reduce the restrictions to LIF
to some extent whereby clients access certain amount of deposit he/she has deposited.
