BARRIERS TO ACCESSING BANK LOANS: AN ANALYSIS OF CAUSES AND IMPACTS ON LOW-INCOME CITIZENS IN TANZANIA

This study aims to explore the barriers that prevent low-income citizens in Tanzania from accessing bank loans, with the focus of identifying the underlying causes and evaluating the socio-economic impacts. Using a mixed-methods approach, the research combines survey of 200 low-income individuals and interviews with bank officials to gather both qualitative and quantitative data. The findings reveal that major barriers include stringent collateral requirements, high interest rates, limited financial literacy, and a general mistrust of formal financial institutions. These factors contribute to widespread financial exclusion limiting opportunities for personal and business development. The study limitation lies in its focus on urban areas, which may not fully represent the rural experience. Practical implications suggest that policymakers and banks should revise loan conditions, promote financial literacy, and explore alternative credit scoring models to foster greater financial inclusion. Socially, the research emphasizes the need for inclusive financial policies to reduce economic inequality and empower marginalized communities. This study offers unique insights into the financial challenges faced by low- income citizens in Tanzania, contributing valuable knowledge to the broader conversation on financial inclusion in Africa.