The main objective of the Improvement of the Managerial Capacity and Performance of Grassroots MFIs component is to develop and strengthen the operational and financial performance of both existing and new grassroots MFIs and Solidarity Groups (SGs) that meet the financial needs of the rural poor in targeted program areas by

	Developing operational frameworks for MFIs;
	Capacity building of Local Training Institutions;
	Strengthening MFIs Management capacity, and
	Institutional support for grassroots MFIs

Developing Operational Frameworks for MFIs

The objective of this subcomponent is to implement key policy and institutional reforms in the Micro Finance Institutions (MFIs) sector. Strategies for success include the following:

• To support grassroots MFIs and develop detailed policy, governance and the implementation guidelines within the overall national framework
• To help MFIs to operationalize the Bank of Tanzania (BOT) regulatory and supervisory guidelines
• Special studies to be undertaken in the registration of unregistered informal groups (CBO/SGs) within registered MFIs and preparation of registration modalities covering different types of registered MFIs.

The Programme Management Unit (PMU), in collaboration with Zonal Management Units (ZMUs), District Micro-Finance Institutions Supervisors (DFISs), District Cooperative Officers (DCOs), and District Community Development Officer (DCDOs), have the overall responsibility for the development of a common policy and operational framework for grassroots MFIs.

Capacity Building of Local Training Institutions

The objective of this sub-component is to develop sufficient expertise in micro finance “best practices” in order to be fully familiar with innovative financial management, gender specific and participatory grassroots level approaches. Strategies for success include:

• Support a comprehensive Training of Trainers (TOT) programme for contracted local training institutions and MFIs, Training Services Providers (TSPs) and international MFI/TSP
• Contracted TSPs to organise various initial workshops for grassroots MFIs selected through PRAs in pilot districts in order to assess and identify their training needs
• Assessment of trained local training institutions as competent MFI/TSPs.

The PMU, in collaboration with ZMU, have the overall responsibility of seeing to it that the capacity of local training institutions is enhanced by:

• Supporting a comprehensive training programme for contracted local training institutions and MFIs, TSPs and international MFI/TSP
• Ensuring training needs assessment (TNA) of MFIs is conducted
• Preparation of training materials for field staff based on standard MFI operating procedures

Strengthening MFIs Management Capacity

The overall goal of this subcomponent is to strengthen the performance, outreach, leadership, staff efficiency and active membership participation in MFIs/SGs with particular emphasis to females. Strategy of success include:

• Technical training for current committee members, staff, ordinary members, potential and future female leaders in overall governance, bookkeeping and financial management and savings and credit operations.
• Training District Council field officers who handle grassroots MFIs.

The PMU is collaboration with Training Services Providers (TSPs) have the overall responsibility for strengthening MFI management capacity.

Institutional Support for Grassroots MFIs

The objective of this subcomponent is to enable MFIs representatives exchange ideas and share experiences with other peer actors in regions in order to improve their performance as well as improving materials supplies and financial security

Success for this subcomponent will depend on

• MFIs representatives to be financially supported for study tours and workshops
• Providing financial assistance to progressive stage 1 + 2 MFIs in procuring money safes and supplies

The ZMUs have the overall responsibility for financing essential activities under this sub-component. Programme financing include MFI exchange visit study tours of which participants visiting model MFIs in different districts and regions ; money safes for MFIs with proven track records to provide security for cash collected as savings and disbursed/collected as loans; special provision for international study tours to allow Tanzanian MFIs exposure to successful MFI operations elsewhere in Africa.