Micro financing out of poverty

Micro financing is the go to solution for small businesses as banks tighten lending conditions to stifle Non Performing Loans (NPLs). In Tanzania, as elsewhere, NPLs are no longer a problem for individual banks, rather a national economic problem managed by the Central Bank. The Bank of Tanzania (BoT) now provides guidelines for banks to curb NPLs and to help, it has created what is referred to as Credit Reference Bureaus. These bureaus are meant to protect banks against bad credit or more directly, to protect them against bad debtors. In Tanzania, there are now two credit reference bureaus both meant to protect banks from crippling NPLs. Rather than deal with recovery of bad loans, the bureaus are meant to keep banks from lending to potentially ‘bad debtors.’ Unchecked NPLs could bring a bank to closure, that means affecting all other bank customers, now multiply that across several banks and you have the 2008 global economic depression. This is why governments are warrant to step in, because NPLs could effectively cripple an economy. This is because the debtors are large corporations and companies that employ numerous people, so when these companies are forced to close doors because they can no