Assessment of Resource Mobilization Strategies and their Impact on Microfinance Institutional Sustainability in Tanzania: A Case of Ubungo Municipality

Abstract

The purpose of this research was to analyze influence of resource mobilization strategies on the sustainability of microfinance institutions in Ubungo Municipality, Tanzania. In particular, it analyzed the potential relationships between investment strategies, diversification strategies, and partnership strategies and the positive contribution of each of these strategies to the sustainability of such organizations. A descriptive survey design was employed to investigate the effects of resource mobilization strategies on the sustainability of Microfinance Institutions in Ubungo Municipality, Dar es Salaam. The study conducted was on a population of 110 employees from five MFIs and a sample of 86 respondents was drawn by using stratified and simple random sampling techniques. Data were gathered through closed-ended questionnaires and were analyzed using descriptive statistics and multiple linear regression in SPSS. Results from this research demonstrate that of the three resources mobilization strategies, current investment strategies fail to positively contribute to institutional sustainability, indicating the vacuity for resource mobilization through more strategically congruent investment approaches. On the other hand, diversification and partnership resource mobilization strategies had significant positive impact which further emphasized multifariousness in building financial robustness and long-term sustainability. The study concludes that MFIs need to reconsider their investment behaviors, diversify through knowledge-based diversification of product offerings and reinforce strategic partnering. The study suggests that focused investment, product innovation, staff training and proactive engagement with outside partners are critically needed for the sustainable institutional performance of the MFIs