Effectiveness of microcredits provision by women development fund on enhancing household wellbeing in Tanga city, Tanzania

Abstract

The Women Development Fund, like other microcredit models, aims to uplift women who lack adequate access to financial services for the enhancement of their well-being. Its objective is to break the vicious cycle of poverty by facilitating income-generating activities, thereby increasing household income and expenditure. However, the actual effectiveness of WDF microcredits on enhancing well-being remains inadequately analysed. This study aimed at evaluating the effectiveness of the Women Development Fund microcredits on household wellbeing in Tanga City. The analysis was guided by the null operational hypothesis that the microcredits provided by WDF have no significant positive effect on household well-being in the City. A cross-sectional design was employed, and 100 female beneficiaries were selected as the sample size. Questionnaires, interviews, and focus group discussions were utilised as data collection tools. Results indicate that the percentage of Women Development Fund microcredits explains 56% of the variation in income and 61% in expenditure. It is concluded that Women Development Fund microcredits have a significant positive impact on household well-being, particularly with respect to settlement and children's education. However, the impact on medication and health was found to be insignificant (Wald Chi2 (09) = 11.0 for medication/health, Wald Chi2 (09) = 10.03 for settlement, and Wald Chi2 (09) = 10.03 for children's education). Therefore, it is recommended that the government and other stakeholders strengthen the WDF, increasing access to microcredits and implementing singledigit interest rates.