Mushrooming Village Community Banks in Tanzania: Is it really making a difference?

Copyright © 2014 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. ABSTRACT: Village Community banks have been reported to benefit the poorer men and women in developing countries since their establishment. In Tanzania, VICOBA and other informal financial institutions have reached 27.9 % of rural communities who were initially unserved. Much as the grassroots communities have been served by VICOBA few studies have been conducted in Arumeru Distict to evaluate how VICOBA have benefited the poor. It was from this concern that this study was conducted in June 2012 to assess the services, achievements and challenges pertaining to VICOBA in Arumeru District. A sample of 96 respondents was selected for the study. From the study it was found that Village Community Bank members of Muhorere, Mchele mchele and Mwangaza groups have benefited as members and sole owners of the banks. Members have been empowered in different skills and received different services such as soft loans, savings, shares, trainings and social or emergency loans. The banks on the other hand have achieved a lot since their commencement. There has been an expansion of their member base, their stakeholder base and even their capital base. Nevertheless there have been some hurdles encountered such as illiteracy for some members, inadequate capital and lack of bank offices among others