Structure, Principles and Operation System of VICOBA Lending Scheme
1.1 Structure and principles of VICOBA.

The adoption of Village Community Banks (VICOBA), best known as “Mata Masu Dubara (MMD) Model” is based on its suitability and effectiveness in catalyzing developmental initiatives through efficient operation of savings & credit services together with appropriate Income Generating Activities (IGA). The loans given by VICOBA are normally soft and affordable to the poor and are utilized to support IGAs that are carefully selected based on the market opportunities, appropriate technology and locally available resources. This arrangement makes VICOBA groups the best economic building blocks (units) within both the rural and urban settings.

VICOBA has proved to be the most effective lending model in rural areas in African countries such as: Niger where it was found in 1991 by CARE International in Niger, Zimbabwe, Mozambique, West Nile Uganda, and Eritrea. This lending model was introduced in our country by CARE Tanzania, Zanzibar Area Office (Jozani-Chwaka Bay Conservation Project) in year 2000 and later adopted by other conservation and community livelihood support projects in Pemba Island and Tanzania mainland. The quick adoption and outspread of this model to various districts/ projects is made through various development agencies mainly due to the good results it has shown in the areas where it was initially introduced.

Among the districts/areas where the model operates successfully with their supporting agencies in blackest are as follows: Zanzibar Islands, Magu, Misungwi and Kibaha (CARE Tanzania); Kisarawe, Ukonga (World Conference on Religion and Peace - WCRP/TZ); Simanjiro, Babati, Kiteto, and Singida districts (LAMP Programme) and Serengeti, Bunda and Ukerewe (DDP Programme) both supported by SIDA, operating under supervision of Orgut Consult Limited in collaboration with the respective District Councils.

Other institutions which implement this model include the WWF Tanzania programme Office (Great Ruaha Water Management Programme in Mbarali district, Udzungwa National Park in Kilolo district and RUMAKI programme operating in Rufiji, Mafia and Kilwa districts); Mahale Ecosystem Management Programme (MEMP) in Kigoma region and RAMAT project in Loliondo district both supported by Frankfurt Zoological Society of Tanzania; Mletele Sustainable Development Project in Ruvuma region, and Women Economic Development Project implemented by Lindi Women Development Trust Fund in collaboration with the Regional Commissioner’s Office (both supported by the Ministry of Planning, Economy and Empowerment - Poverty Eradication Division).

In Mtwara and Lindi regions three awareness seminars have been conducted to the representatives of 11 districts through sponsorship of Poverty Eradication Division, Ministry of Cooperatives Development and Markets and Mwalimu Nyerere Foundation; This scheme has also operated very well in Matombo Division, Morogoro Rural District where the implementation is supported by Swiss Agency for Development and Cooperation and supervised by ITECO Engineering Company in collaboration with the district council.

The effectiveness of VICOBA scheme is due to its special features and operation principles, which emphasizes on:
- self-help initiatives among the group members,
- community capacity building and local resources mobilization,
- community ownership and shared leadership,
- high level of transparency and effective information sharing,
- promotes voluntary accountability among the group members and
- enhances good governance.

Other qualities of this scheme include its ability to build strong groups with limited members (25 – 30), who can collaborate effectively and bring significant economic growth within a short time. In most cases, larger groups have failed to achieve significant economic growth simply because they have too many members to collaborate effectively at their initial stages. On the other hand, larger groups (societies) formed through unification of VICOBA are likely to maintain their good performance because their building blocks (individual VICOBA groups) consist of well-trained and experienced members.

The scheme can be operated at very low costs as it only involves purchases of credits kits, writing materials and members contribution for training costs where applicable and can easily be replicated in other areas.

This scheme is flexible in its implementation as can accommodate other social and economic activities of the target communities such as promotion of local markets and production of goods, rehabilitation of health facilities, environmental conservation initiatives, strengthening education facilities, peace promotion initiatives or facilitation of timely acquisition of scarce or expensive productive inputs/equipment for poor communities. It can also accommodate programmes related to rehabilitation of feeder roads, improvement of water supplies and ensuring security of community members with their properties.

The sustainability of VICOBA scheme depends much on effective capacity building of its 25 - 30 members that are well known to each other and have common interest. After undergoing the required training and receiving proper supervision for a period of one year or more the groups normally become independent and sustainable in their operations.

In principle, VICOBA scheme mainly focuses its attention on benefiting the vulnerable groups as compared to other lending scheme and micro-finance institutions, which focus on providing commercial services only.

1.2 Superiority (strength) of VICOBA scheme over the conventional micro-finance instructions.

1.2.1 It is a self-financing scheme needing no external funds as the group members work with their own capital mobilized through shares and other contributions. Matching loans may be provided to support substantial loaning during the fist cycle.

1.2.2 The system on financial transactions is quite simple and transparent. Documentation of the transactions is convenient even to the local people who are semi-illiterate. For example, symbols and illustrations are used to clarify some of the complex mathematical operations.

1.2.3 Unlike with the conventional micro-finance institutions, levels of the interest rates are low (5-10%) and are decided by the members. Moreover, the interests paid are shared among the borrowers and thus increasing the range of benefits to the members. In this way, the interest earned on loans goes directly to the group and not to external services provider(s). This demonstrates the focus of VICOBA on assisting the poor to improve their living standards.

1.2.4 VICOBA groups are guided by regulations, procedures and by-laws formulated by their own members, and therefore promoting the sense of ownership. The consultants and field agents just provide guidance and advice in the process.

1.2.5 The group leadership team is democratically elected from among the group members and serves voluntarily; this makes the leaders win the members’ trust, respect and commitment to obeying their instructions.

1.2.6 The internal social pressure of the collateral groups of five (5) members each and that of the large group encourages members to mobilize weekly shares, reimburse loans on time and attend group meetings regularly.

1.2.7 VICOBA scheme does not prevent its members to participate in other savings and credit activities run by other settings provided they continue abiding to the agreed by-laws, regulations and procedures.

1.2.8 The scheme emphasizes on capacity building of its members in order to improve performance of their activities. Normally, before the onset of the VICOBA business operations, members attend capacity building training courses on basic savings & credit skills, business Selection, Planning and Management (SPM).

1.2.9 Proportional sharing of revenue generated from loan interests and other group activities encourages further investment among the individual members.

1.2.10 The shares and profit distribution system allows participants to acquire substantial amounts of capital that can be invested into longer-term activities.

1.2.11 VICOBA scheme uses very simplified training methodologies (simulative training techniques) that are easily understood by people of all educational levels.

1.2.12 Promotes groups self help spirit as all group operations are done by its members on voluntary basis (no salaries are paid to leaders). Costs on essential services are met through members’ contributions.

1.2.13 Promotes love and cooperation among the group members and the entire communities living within the target area.

1.2.14 In order to enhance efficient utilization of the loans taken, VICOBA scheme encourages training on appropriate technology based on marketing information, community needs and locally available resources. The organization or development partner may support the group members attend training on appropriate technology.

1.3 Inferiority (weakness) of the conventional micro-finance institutions and lending schemes

1.3.1 The conventional micro-finance institutions are commercially oriented charging too high interest rates (17-25%) for the poor to afford. The entire profit gained from loan interests is retained and part of it is used to cover high operation cost including transport cost and salaries of professional credit officers.

1.3.2 The service ownership and management remain in the hands of the micro-finance institutions and the clients just remain to be recipients of the financial services.

1.3.3 No managerial capacity building is given to the group members rendering them solely development on support from the micro-finance institutions.

1.3.4 Most of the micro-finance institutions do not provide business skills training and other technical support to their clients. Some of these encourage their clients to attend training provided by other specialized institutions at their own cost. May clients of the micro-finance institutions fail to meet the needed training costs. This problem leads to poor performance of businesses and eventually to serious loss of capital.

1.3.5 The level of service mainly depends on the number of credit officers employed by the micro-finance institutions and availability of facilitates for transport to reach wider area, staff salaries, etc.

1.3.6 Loans’ collateral at primary level requires borrowers to pledge their fixed assets that are eventually sold to recover the loans in case of any default.

2.0 VICOBA and SPM Training Methodologies.

2.1 Training objectives.
VICOBA scheme and SPM training methodologies are both new programmes in our country, using very effective simulative techniques and training aids. This means most of micro finance practitioners and business development trainers are not familiar to these training programmes. Therefore in order for an organization to adopt them it must make sure that its staff have attended a 16 days classroom training and where possible attended some few field training sessions for induction process. Field training exercise is conducted through the demonstration groups established during the TOT course. Alternatively, the project can opt to involve consultants in its project to provide technical assistance at its implementation stage.

The essence for the organization hiring a consultant is due to the fact that most of the new trainers face problems in mobilizing the communities, forming effective groups and initiating banking and training activities. Mainly this is due to lack of good experience in managing microfinance projects with rural communities. This also depends on the capacity of the trainers and level of understanding of the community members the project wants to serve.

2.1.1 VICOBA training phases
The implementation of VICOBA training methodology goes over four (4) phases. These are: (1). Introductory phase (2). Intensive training phase
(3). Development phase (4). Maturity phase Introductory phase - 3 weeks
Objective: To identify client groups, acquaint them with the basic characteristics of the VICOBA methodology and recruit them into the programme.

This phase will be quite rapid, depending on how familiar with the situation the VICOBA project already may be. Once target villages are selected the three introductory meetings can be managed in as little as three weeks.

This phase is the most important and constitutes the major portion of the programme success. The Field trainer introduces the project, benefits and responsibilities of the group members to the village local leaders, extension government officers working in the village and any other influential people living in the village. When these leaders accept the project, the second meeting for the communities will then be arranged. At the end of the second meeting the communities who have accepted the project will be needed to arrange the third meeting for groups formation, registration and arrangements for intensive training and banking operation with the registered groups. Intensive Training phase: - 4 months
Objective: To enable group members understand clearly how better to manage their group activities and provide business management skills that will make them be able to select, plan and manage their IGAs profitably.

This is a very important phase where group members attend an intensive training programme in 4 months. The groups meet once in a week for banking and training activities. They can opt to meet twice a week if it is convenient to them. The intensive training phase contains two training modules. In the first module group members are trained on group management and banking operation system while in the second module they are trained on the techniques of selecting appropriate income generating activities (IGAs) for their families, developing business plans and business management techniques.

Two modules will be covered during this phase:
Module One: (Structure, Principles and Operation system of VICOBA groups). Topics covered in this Module includes:-
- Briefing on historical background of the program, Course objective, Training phases and topics covered in each Module, and Training Methodologies and facilities required in each topic.
- Application of Introductory meetings with local leaders and villagers (importance and techniques)
- Meaning and importance of VICOBA groups for family development, socially and economically.
- Meaning and importance of group leadership
- Developing group’s Internal Regulations
- Conflicts Resolution Techniques
- Determining the group members Optional Training

Module two: This Module provides basic knowledge and skills required in Selecting, Planning and managing the most appropriate income generating activity (IGA) for the family. Topics contained in this Module are as follows:
- Brief introduction to SPM training methodology: historical background, description on the topics contained in the program, training materials required in each topic and how to apply in the training process.
- Techniques for selecting the most appropriate income generating activities for the family
- Techniques for initiating and running an IGA, and selling goods at profit
- Techniques for determining a startup and running capital of the selected family IGA
- Techniques for developing an effective plan of how to startup and run the selected IGA profitably.
- Basic management elements to consider when running a business:
- Control of funds generated from sales
- Four important areas of allocating funds generated from sales
- Proper utilization/allocation of productive resources used in running business
- Management of business risks Development phase - 4 months or more
Objective: Assist the group to become self-governing.
The Field trainers assist the groups to move towards independence. The Field Trainers visits the groups on weekly basis for the first two months and thereafter once a fortnight for the last two months, (twelve total visits).

However, Field trainers can intervene frequently when the group needs help of his/her technical assistance. Likewise, the visits should take place during periods of loan disbursement and reimbursement, as those are generally the times when the participants encounter the most difficulties. Maturity phase: - 3 months or more
Objective: Assist the group to become independent from the project
The Field trainers will visit the groups at the end of each month to evaluate group’s performance and stability. Based on this evaluation, they will decide if the group is ready to be independent, or if it still needs assistance. Based on the evaluation results the Field trainer can estimate appropriate time, and determine type and magnitude of additional assistance to the weak groups.

2.2 VICOBA Institutional Structure and Functions.
Internal institutional structure of the groups is made up of the Chairperson, the Secretary, the Treasury, Money Counters, Key Holders and Discipline Master. Jointly they ensure groups’ survival and the goal is attained, by carrying out such activities as the overall supervision of the group in view of the procedures guiding management of shares, loan management, discipline and ensure reciprocal responsibility between the groups and its members (chairperson); supervision of the groups’ banks (Secretary); collection of the shares, custody of the credit kits and overseeing the functions of the groups’ bank account (Treasury); money counting after collection from different contributions (money counters); ensure the safety of the keys of the credit kits and opening and closing the kits during and after contribution exercise (key holders), and overseeing adherence to the rules of the groups (discipline master). Group trainers provide overall guidance to the group, and, in collaboration with the chairperson, ensures group cohesion, important for group survival, is attained and maintained.

Such job description underscores the fact that the responsibility for day-to-day functioning of the groups, and ultimately attaining and maintaining the most important intermediate goal of access to credit, will primarily and structurally fall(s) to group members, particularly group leadership, which in total is comprised of 9 individuals.

2.2.1 Groups’ Savings and Fund Mobilization
The groups’ savings and fund raising will be done on weekly basis, since the formation of the group to the end of VICOBA group operation cycle. Formation of groups is expected at the beginning of the second month of project operations. The savings are mobilized through share collections from the members. The value of the share is determined by the members themselves depending on their economic status. A member is allowed to buy a minimum of one share and a maximum of three shares. This is done for the purpose of minimizing dominance among the members. Members’ shares are specifically for micro-enterprise activities. The shares accrued are in turn used as a revolving fund among the group members as loans.

Another fund, which will be raised during the weekly meeting, is the social welfare fund. This fund includes education, health, environment and empowerment funds for the welfare of the group members. Contribution for the fund is normally very meagre; it ranges from one hundred shillings to one thousand shillings (T.shs 100-1,000), depending on the needs and economic/financial capability of group members. Its purpose is to solve social pressures that might crop up among the group members without affecting their shares that is meant for capital of their income generating activities. Members will and as a practice access this fund after a period of six months, to allow the fund to grow gradually sufficient. Share and welfare funds collection start immediately after groups have been formed.

Other mechanisms for raising funds are loan insurance and loan interest. Loan insurance is paid the same day members collect the loan. It normally ranges between 5 and 10% depending on the crime rate of the area and prevalence of natural hazards, such as droughts and floods. Interest rate ranges between 5% and 10% depending on the loan period. It will be paid and is divided equally into the number of months, as the loan duration. VICOBA lending model has two types of loan: the short-term loan (3 months) and the medium loan (6 months).

2.2.2 Loan Access and Investment.
Normally, VICOBA group members begin to access credit between 14 and 16 weeks of the groups’ inception. But if the group members and the project management have come to agreement that group’s weekly meetings has to be done twice a week during the intensive training phase, this will reduce training period from normal 4 months (16 weeks) to 2 months (8 weeks). Under such circumstance, VICOBA group members will begin to access credit facilities between 10 and 12 weeks of the groups’ inception In some of the well-established groups, and especially those with share values of 2,000 T.shs and above, individual group members access loans as high as 1,000,000 T.shs in just one year period. Deliverance group, funded by SEDIT, which is in Segerea ward, Ilala Municipal, in this instance, is a case study. The group in question is one-year old.

VICOBA lending scheme emphasizes members to request and collect the loan money after they start IGAs, for those without any; and for members who already have IGAs, are requested to single out which one will be supported, for those with more than one. They are encouraged and advised to invest in IGAs with good productive potential. The prescription and orientation provide the link between credit and investment and underlay the potential for members to increase (labour) productivity and incomes.

3.0 Institutional Arrangements and Functions.

3.1 Training.
SEDIT normally provides all necessary capacity building to project staff (Field Trainers, Project Coordinator and Project supervisors) during the whole period of consultancy assignment. It is with this respect; SEDIT team in collaboration with Field Trainers carries out the function of groups formation and conduct groups’ intensive training.

For the success of the project, extended technical support by SEDIT is recommended in the initial 6 months of the project, as this will enable the project management to do the coordination of the project in the most proper ways. During this period, SEDIT can assist the project management to set up new strategies to raise more funds, sustain the newly formed VICOBA groups and expand the projects to new areas. There will be various capacity building trainings to different levels of the implementers to create enough awareness that will lead to development of effective workable plans. The Field Trainers team will access direct technical assistance from SEDIT throughout the initial 6 months and after such period upon request. During this period SEDIT experts will work jointly with the Field Trainers in the project to establish and train VICOBA groups through induction process. SEDIT will provide experienced VICOBA trainers to support the project field trainers team to execute various tasks ahead them.

3.2 Supervision
In the first 6 months, SEDIT will carry on with supervision and provision of technical assistance to the trainers during groups’ initiation and intensive training, as well as during the first loan disbursement. This exercise will be done to the groups formed in the areas/villages selected by the project.

VICOBA trainers jointly with Project coordinator will be responsible for day-to-day supervision of the groups, and development and sustainability of the project. The project coordinator will be appointed from among the senior officials of the project management but with relevant background of VICOBA scheme; most recommended someone with community development or cooperatives management academic discipline.

3.3 Monitoring and Evaluation.

3.3.1 Monitoring.
Monitoring will be done by focusing on the performance indicators, to assess whether the project at different stages of the implementation is on the right direction towards achieving the goal (s) as they appear on the logical framework. The basis for monitoring will therefore be the logical framework.

This will be carried out in a participatory manner, through different stakeholders doing frequent on-site visits, different reports from Trainers and Project Coordinator, as well as technical reports by SEDIT and on-site feedbacks by the VICOBA group members. However, few visits by SEDIT consultants, 8-10 working days after every three months is recommended.

3.3.2 Evaluation.

The focus for the evaluation, tentatively after one year of the VICOBA groups operations, will center on technical aspects, such as the capacity inherent in training module and group structure and procedures, to achieve the goals, overall management and coordination; assess the impacts the project has had on the lives of the people, in terms of material, financial and behavioural and/or perceptional aspects.

The project will have Monitoring and Evaluation (M & E) officer who will be responsible for such activities as organizing review and planning workshops, review the overall implementation progress in the project, problems, approach of the project, and assess findings for (future) planning activities.

3.4 Project Sustainability and Risks.

3.4.1 Sustainability Strategy.

The pillar of sustainability of VICOBA scheme depends much on the investment on the community’s capacity building through training and support in establishment of communities Savings and Credit Banking groups (VICOBA). The essence of VICOBA is the formation of (enterprise) groups of community members who are well known to each other and have more or less common interest. If these groups are well organized, trained and supervised for a period of one year or more they normally become self dependent and sustainable in their operations.

Moreover, VICOBA fits its institutional structure and functional procedures in, or to reflect, the traditional and local social values and organization, resources endowment, institutions, culture, attitude and preferences, giving it a face of “accustomed or familiar environment”, and by far seems to be consistent with what Alila classifies as institutional-building, which has been lacking or has been weak for micro-credit in (most of) African rural settings. Such institutions have both attributes of being technical instruments, designed as means to definite goals, and have a ‘natural’ dimension, being products of interactions and adaptations, having become receptacles of group idealism. They are therefore less readily expendable . In a nutshell, what is important, VICOBA groups’ operation systems place greater emphasis on elements of self-help initiatives, community capacity building and local resources mobilization, community’s projects ownership and joint management.

VICOBA Scheme has proved to be a very effective to the rural communities where it operates with very little cost and can easily be integrated to other development initiatives and give better results within a short period. The interest rate to the loan, as well as the insurance, are set at a lower rate, improving the capacity of the members to remain in the groups, and enable them to retain portion of earned incomes good enough to improve not only their life circumstances, but also (individual) savings and investments. Moreover, what they plough back to the group remains own (group) members money.

The rural, on the basis of individual resources at disposal, are capacitated to start both farm and non-farm productive micro-enterprises of their own choice and, taking into consideration marketing potential of the area. Increased and productivity, marketing and perceived (IGAs) own initiatives and ownership, as well as perceived and actual ownership of the overall (VICOBA) project, such as full ownership of all the money raised through different contributions, are the cornerstone of VICOBA sustainability. Motivation of the group members remains consistent.

At the end of each consultancy work that SEDIT performs, develops phasing out strategies, which assures continued technical assistance to the projects’ implementing teams on need bases. This will include monitoring and evaluation of the project operation, follow-up training activities and supply of additional groups banking facilities if at all needed by the project.

In addition to that, project-specific conditions are set to strengthen the sustainability potential. The following conditions may be opted to help strengthen sustainability of the project:

(i) Every group member will contribute T.Shs 10,000/= by installments as 10% training cost of every member in each VICOBA group’s operation cycle (equivalent to one year) to the project management. This money will assist to cover project costs including field trainer’s allowances.

(ii) Contributions of 5,000/= from each group member to cover costs of credit kits given to each VICOBA group. The amount collected from the credit kits will generate project’s revolving fund that will be used to acquire additional savings and credit facilities for the expansion of the project.

(iii) One or two days VICOBA project awareness and planning workshop will be done to all senior officials of the project in order to bring common understanding of the scheme and plan the way forward. This workshop will come up with effective projects’ sustainability plan and well developed monitoring system. This will be developed to gather support and adherence by the project officials.

(iv) When VICOBA groups are economically grown up they will be facilitated to form strong Savings and Credit Cooperative Societies or get registered as Community Based Organizations/Associations (CBOs or NGOs). This process will enable the groups to acquire legal status and therefore qualify to access more support from financial institutions and development agencies.

3.4.2 Project Risks.
HIV/AIDS prevalence in most of the Tanzania regions is above the national average of 7%, standing at 7.4%. High mortality does not only shake the equilibrium of the group in terms of the acceptable amount of the members, but has effects in agrarian (subsistence) society where the principal capital investment is human capital. HIV/AIDS has the effects on agricultural productivity. It also reduces the amount of the money available for investment, in terms of contributions to the group loan fund and affects social loan insurance funds, which upon the event, has to cover loan dying away with the victim.

Nonetheless, in case of deaths, the group has inherent adoptive mechanism and capacity, whereby at the beginning of the 2nd group cycle, which comes around after between 12 and 18 months, new members are allowed in.

Natural hazards such as droughts, floods and epidemic, such as cholera, could have negative impacts especially on individual (labour) productivity, thereby compromising instituted strict observation of the frequency and amount due for contributions, as well as the adoptive capacity of the welfare funds (in case of epidemic).

Prior to initiation of the project, socio-economic and agro-ecological information is sought for identifying communities prone to the hazards, as well as the extent, frequency and nature of the hazards, for sensitivity analysis. Loan insurance rate is set according to the nature, frequency and extent of the hazards, ranging between 5% and 10%, increasing according to the level and frequency of the risks in question. This enables groups, in case of drought, for example, to compensate the loss by providing another loan from the loan insurance funds to the affected member (s).

Moreover, groups are assisted in setting internal mechanisms to control risky behaviours, by the use of group pressure and group norms. As an example, members who dwell in areas where rivers are nearby are advised against cultivating on riverbanks and/or stream valleys and close to riverbanks during or close to the rain season. Mechanisms here reduce the level of negative impacts, increase the chances for the group not to be affected, and increase the chances for the group to survive hazard(s).

Loan insurance fund is also resorted to in case of social risks, such as verified and proved theft, fires, and other forms of accidents, such as vehicle accidents.

3.5 Project Benefits
VICOBA scheme is much more of a capacity building in terms of training programme than a credit scheme designed for bringing credit to the people, such as MFIs, as it is solely reliant upon members’ collective savings. Projects that support VICOBA, support the VICOBA training network and provides some of the vital equipments, such as locked cash boxes, forms, and ledgers required for record keeping. When the group has worked through the basics of savings and fund management, they move onto business planning. At the initial stage, the individuals are encouraged to come up with small, short-term investments that need a modest start-up capital. To underscore the benefits of VICOBA, LAMP Programme and SEDIT programme, will be cited, as appear under section below.

Land Management Programme (LAMP) is promoting sustainable land use in Manyara and Singida Regions, under ORGUT Consult AB, while SEDIT is running a VICOBA project namely “Savings and credits facility for vulnerable communities livelihood support in peri-urban areas of Dar es Salaam region through VICOBA lending scheme”, in Ilala District.

3.6 Economic Benefits.
In the four LAMP districts of Kiteto, Babati, Simanjiro and Singida, VICOBA scheme has assisted communities not only with savings and credit but it has also built the capacity of the members to better manage their business and household incomes. By October 2006 there were 117 groups with 3,257 members (of which 2,050 were women). In total, these groups have issued loans in the amount of TSh 155 million (US $123,000), and had mobilised capital in the amount of TSh 198 million (US $157,000) The repayment rate is nearly 100%.

VICOBA has another important strategic impact, that of cultivating the culture of saving: In the Lendanai Village in Simanjiro District, Mrs Emiliana Kimaro, 43, mother of four, notes: “Now I have got money and I can save. I see this as a miracle in my life. I did not expect to get such a good life”. Some experts believe that it is savings (and not so much the credit) that open the door to the future. Credit and financial institutional intervention greatly enhance economic strength and eventually breaks the vicious cycle of low income-low savings-low investments, for which most Africans and Tanzanians are acknowledged . Savings, according to URT , maintain consumption, particularly during periods when income flows are low, such as during the off-season before crops are harvested, and to make investments, such as housing improvements. VICOBA operations increase the all-year-round production and trading potential, as non-farm activities are at peak during the agricultural lean period. It enhances inter- and intra- seasonal maximization of time, and agricultural and non-agricultural resources use and incomes.
Investment in agriculture could increase upon changes in perception by the members about farming, from being perceived as merely a source of subsistence to having a commercial and economic value.

Having noted the success in Loiborsiret Village, the former Regional Commissioner for Manyara Region, Col Anatoli Tarimo, on one of his visits to Simanjiro District, urged the remaining districts in the region to visit Loiborsiret villagers and learn from them. “The Simanjiro District Council has directed that even water schemes should be handed over to VICOBA groups. Currently five villages have agreed to hand over dips to VICOBA: Orkesmet, Naberera, Namalulu, Emboret and Komolo”, says Mr Raphael Mawi, Assistant Planning Officer in Simanjiro District .

Since its establishment in November 2006, eighteen (18) VICOBA groups, run by SEDIT in Ilala District, has been formed and nearly 500 largely poor community members from Kinyerezi, Segerea, Ukonga, Buguruni and Ilala wards in Ilala Municipal have already joined the project. Total savings of about T.shs 70,000,000 has been mobilized by the group members as loan funds for a period of one year.

After one or two years of operation, some VICOBA groups can gradually evolve, and choose, to collaborate with commercial banks that offer services to form savings and credit cooperative society (SACCOS), like what has evolved from WCRP-managed VICOBA in Ilala District, Dar es Salaam, creating USACA SACCOS. The experience from VICOBA helps members draw up the necessary regulations and operating procedures to set up their own cooperative, which have proved to be more strong and successful than mainstream and/or established savings and credit associations.

3.7 Social Impacts.
Besides raising and managing incomes, the programme has long-term, strategic and transformative impact. According to Mr. Ngalla, who supervises VICOBA in Simanjiro district, women have been empowered and given greater voice in the management of the community dip project, in Loiborsiret village, in Simanjiro district. “Men have realised that when women are given chance they have great capacity to create development and changes in the community. Women have demonstrated that they can better handle community funds compared to men,” he remarked. “Most of the poor households have moved from mere subsistence and daily survival to planning for the future and investing in better nutrition, better housing and children’s health and education”, said Mr Saidi Mtoro, District Trade Officer and VICOBA supervisor, Singida district.

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