Abstract:
The degree of access to financial among the Rural Producer Organizations and their individual
members is very low in most of the developing countries, partly as a result of the underdeveloped
institutional framework. According to a survey by the Bank of Tanzania (BOT) in 1997 the size
of the unmet rural financial services demand is huge, especially after the introduction of the
financial sector reforms and privatization. The key findings indicated that 82% of the rural
households were saving informally, mostly at homes. Of those operating bank accounts, they only
saved 12% of their total savings. On the other hand, about 94% of the total households were willing
to borrow if there were available resources and appropriate products and methodologies (BOT,
1997). A similar survey conducted by the BOT in 2002 revealed that between 6%-8% of the total
rural credit demands were met by the existing formal financial institutions (IFAD, 2002:19)
