Microfinance Services: A Missing Product in Islamic Banks in Supporting Small and Medium Enterprises in Tanzania

Abstract

The study aimed to sensitize the Islamic banking in Tanzania in initiating Islamic microfinance which is a missing tool in boosting small and medium business ventures in Tanzania. The study employed descriptive corelational research design whereby data collection was done through both probability and non probability sampling design. Data were collected in three banks (National Bank of Commerce, Kenya Commercial Bank, and Akiba Commercial Bank) which are Islamic Bank windows, and in Amana Bank which is a fully fledged Islamic Bank. The findings of the study revealed that Islamic microfinance is concerned with the provision of financial and non financial services to the poor who desire to embark in entrepreneurship based on Islamic values for the aim promoting development and welfare of the entire society. Based on those findings, the study recommends that Islamic microfinance should be established in those carrying out Islamic banking in Tanzania because these interest free financial institutions often support Small and Medium Enterprises with small loans for the purpose of improving their business operations.