Prospects and sustainability of the self-help groups in the context of rural households’ economic well-being in Karatu District, Tanzania

The microfinance services in the form of self-help groups (SHGs) have recently widens the financial services in rural areas in the developing countries. Despite self-help group’s prominence, there is limited evidence from Tanzania of both their effects on household well-being and the sustainability of such groups in rural areas. The objective of this study was to examine the prospects and sustainability of SHGs in improving economic well-being of rural households. The Collective Action Theory guided the study. Mixed methods cross-sectional design was applied in this study to obtain deep insights issues under the study concerning self-help groups. The targeted population in which the sample was drawn was rural household members. Purposeful sampling was used to select the respondents for interviews and focus group discussion, including members of self-help groups and key informants. Also, snowball sampling was used to select non-members of self-help groups for interview. The total of 44 respondents interviewed, which included household members who were members of SHGs, non- members of SHGs, and key informants. Content analysis was used to analyse the data collected. The findings revealed that there is a prospect of self-help groups to improve the economic well-being of rural households, as majority of the respondents gave positive responses concerning assets, increased income among other benefits which has contribution on improving the living standards of the rural households. However, there are issues need to be considered as are likely to affect the sustainability of self-help groups, such as financial literacy and entrepreneurship knowledge and skills. Therefore, it is recommended that policy makers, non-government organisations and other agencies should involve in promoting self-help groups, build capacity for these groups, and provide financial literacy as well as entrepreneur knowledge and skills in rural areas.