Abstract:
Microfinance institutions have emerged as one of the major contributors of poverty alleviation
and sustainable economic growth. Specifically, women business sector has found he way to
improve their business through the use of microfinance services. However, taking loan or
borrowing is easy but challenge comes at times of repayments. The delays in repayments and
loans default threaten the microfinance institutions. This is due to negative effects of lowrepayment rates. Thus, the study assessed low loan repayment rates to microfinance institutions
by business women in Tanzania. The paper addressed two specific objectives. The first was to
examine effect of loan's conditions set by microfinance institutions on the loan repayment for
business women. The second was to determine factors influencing the repayment of loans
borrowed by business women to selected micro-finance institutions. There were four loan
conditions set by MFls namely Interest rate, training on loan management, loan repayment
grace periods and repayment schedules and loan repayment enforcement measures. Multiple
borrowing by many business women was mentioned as one of the major factors influencing
loan repayment in microfinance sector. The ability to repay multiple loans becomes a challenge.
Other factors include family responsibilities, lack of financial and entrepreneurship training and
inconvenient loan repayment time. Therefore, there is a need to undertake training on loan
management and business management to the clients
