The influence of residential license on household access to formal loans in Dar es Salaam City

This research was done in Temeke Municipality in Dar es Salaam City. Its focus was on *Comprehensive Property Register for Economic Empowerment project which fell under the flagship of poverty reduction programme implemented by the Government of Tanzania starting year 2004. In this programme, the Government aimed at formally registering all properties in informal settlements in order to turn the properties from being “dead assets” to “active assets” because it was theorized that an asset that lacks formal registration and legal ownership has no potential to engage in active land and finance markets. In addition to this objective, the Government also aimed at increasing its tax base because once formalized, owners of these properties would be subject to paying tax to the Government. Towards implementation of this project, properties in informal settlements were formally registered and households were issued with residential licenses as a form of tenure security for their properties. The residential licenses were also expected to be used as collateral in commercial banks for accessing formal loans and credit for the purpose of expanding business enterprises hence improving livelihood of the residents and finding a way out of poverty. The relationship that had been established between residential license and how it influences access to formal loans and credit is what formed the base for this research. This research therefore, was tailored to study and explain the influence that the issued residential licenses have had on household access to formal loans and what has been the experience of households in Temeke Municipality. In addition to that, through academic literature, other factors have been established to have influence on household access to formal loans. These factors include household vulnerability, need for formal loans and loan conditionality. Together with residential license possession, these factors have been studied as intervening variables to check the extent they influence access to formal loans.