VICOBA

Village Community Banking (VICOBA) was started with the aim of helping people cope with the numerous responsibilities they face in an increasingly unfavorable socio-economic and religious environment. This is done by training participants in crafts production and other activities that can increase their household incomes. In addition, participants contribute individual savings to a savings and credit fund which, in turn, makes small loans to its members.

WIA promotes local community savings and credit groups that build on the traditional “Tontine” methodology where investors pay a sum into the tontine and receive annual dividends on their capital. While tontines are rigid in their structure and provide limited and inflexible access to accumulated savings, WIA adds innovative twists that make it more flexible and extremely attractive to local participants. The weekly contributions are accumulated, with an end date in mind, for distribution of all or part of the funds to the individual members. This lump sum distribution provides a large amount of money that each member can then apply to his/her own needs.

The members of the community savings and credit groups make use of the funds for long and short-term needs on a continual basis, so the funds are constantly working for them, earning interest and not just sitting idle in the group. These loans allow the members to meet their small and medium income generating activities, social obligations and emergencies without having to borrow from a money lender, take an expensive supplier advance, or rely on their relatives. This adds a limited credit perspective to the association. Currently, over 575 people utilize WIA’s 25 VICOBA groups in Arusha Municipality and Babati District.