The Effect of Attitudes Towards Money on Over-Indebtedness Among Microfinance Institutions ’ Customers in Tanzania

This study investigates the effect of the four attitudes towards money (FAM), namely security, love, freedom, and power, on over-indebtedness among MFIs customers in Tanzania. This relationship has not been investigated in previous studies. The study used an analytical cross-sectional design involving a survey of 428 MFI customers using a semi-structured questionnaire. Structural equation modeling (SEM) was employed for data analysis. The findings show that power (β = 0.432,p = 0.000), love (β = 0.114,p = 0.004), and freedom (β = 0.101,p = 0.02) significantly and positively affect over-indebtedness, while security (β = -0.243,p  =  0.003) negatively and significantly affects over-indebtedness. This study provides an alternative way for MFIs to reduce over-indebtedness by focusing on borrowers’ attitudes towards money. This will, in turn, enhance loan repayment rates, sustainability of MFIs, poverty reduction and quality o f life among MFI customers.
Source: Applied Research in Quality of Life - Category: International Medicine & Public Health Source Type: research