Department of Finance

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https://repository.udsm.ac.tz/handle/123456789/58

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Browsing Department of Finance by Author "Ishengoma, Esther"

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    Effect of partner–agent model practice on microinsurance client value: Insight from microfinance institutions in Tanzania
    (2018-02) Minani, Isidore; Ishengoma, Esther; Mori, Neema
    Abstract: In absence of formal microinsurance to protect low-income people against natural and man-made disasters, the partnership between insurance companies and microfinance institutions (MFIs), also known as the Partner–Agent Model (PAM), is gaining global recognition from governments, practitioners, and donors for its poten- tial role to deliver microinsurance. Although the model is still nascent in Tanzania, it has significantly increased microinsurance outreach. However, while the microinsur- ance landscape has been extensively studied, the effect of PAM practice on manda- tory microinsurance client value has not received much attention. Therefore, this study examines how the PAM practice affects microinsurance client value dimen- sions. Surveys were used to collect quantitative data from 229 managers of MFIs involved in PAM, randomly selected from 10 regions in Tanzania. The study applies structural equation modeling, particularly the regression analysis, to examine the effect of PAM practice on the appropriateness, accessibility, affordability, and respon- siveness of PAM microinsurance services. Study findings indicate that though the PAM practice has a statistically significant positive effect on microinsurance client value, the client value does not score well on its four dimensions. Improvement and regulation of PAM practice is recommended to foster microinsurance client value.
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    Financial Leverage and Labor Productivity in Microfinance Co-operatives in Tanzania.
    (Taylor & Francis, 2019) Towo, Nathaniel; Mori, Neema; Ishengoma, Esther
    Microfinance co-operatives (MFCs) are increasingly accessing loans from other financial institutions to finance their lending activities. However, knowledge about the association between loans from other institutions and MFCs’ performance is limited. Therefore this paper contributes to the body of knowledge by extending the application of agency theory to investigate the effe of financial leverage on MFCs’ labor productivity. The paper applies fixed effect regression models on panel data of 442 observations established from a sample of 115 MFCs operating in five regions in Tanzania. The results show that financial leverage has a negative effect on labor productivity. The findings revealed that an increase in financial leverage results in lower labor productivity, which could be due to underinvestment because of the debt overhang problem, higher financing costs (which reduce future invest- ments), high labor costs resulting from the high monitoring of lending, and loan collection activities. Such findings suggest that MFCs have to contain their costs and ensure that they generate more revenues from loans accessed from other financial institutions.