POVERTY ALLEVIATION IN TANZANIA

1.    Introduction

Institutions committed to poverty alleviation must have ideas about why it occurs, why it persists and how it can be overcome to guide their work. Indeed, they have always operated on the basis of specific theories about poverty that reflect their understanding of cultural, social and economic realities. 

Since the second half of the 1980s, public institutions have developed increasingly sophisticated multi-topic surveys as their preferred means to measure, analyse and learn about poverty.  In contrast with single-topic surveys (such as Employment, Income and Expenditure Surveys), these multi-topic Household Surveys are designed to generate information on a wide range of issues intimately linked to household welfare.  At the same time, private development aid institutions and, to a lesser extent, academic institutions were rapidly pioneering a “participatory approach” to developing information and understanding about poverty. 

In their current forms, both methodologies involve poor people in the production of data.  The primary difference between participatory and survey-based research is that the former systematically involves poor people in the analysis of its findings.  It is this analysis, as much as the raw data, which is then synthesised to inform pro-poor policies. 

Some of the advantages to Participatory Policy Research are obvious.  First, data analysis does not depend on speculation by urban elites about the conditions poor people face.  Instead, it is the result of poor people – the “everyday experts on poverty” – reflecting on, theorising about, debating and explaining the world in which they live.  Second, Participatory Policy Research contributes to social democratisation by engaging poor people in policymaking processes.      

On the basis of these characteristics, the Government of Tanzania has decided to make Participatory Policy Research, in the form of Participatory Poverty Assessments (PPAs), a routine part of its Poverty Monitoring System.  As such, the Tanzania PPA Process is firmly enmeshed in national level planning processes.  

2.    What is the Government of Tanzania doing to end mass poverty?

The PPA Process is playing a vital role in the increasingly concerted efforts of Government, donors, Civil Society Organisations, the private sector and ordinary individuals to end mass poverty in Tanzania. 

Of course, Government has been concerned with poverty alleviation since Independence.  However, in recent years, plans and procedures to eradicate mass poverty have multiplied in the form of Vision 2025, the National Poverty Eradication Strategy (NPES), the Tanzania Assistance Strategy (TAS), the Medium Term Expenditure Frameworks (MTEFs) and Public Expenditure Review (PER). 

Vision 2025 describes the general level of development the country wants to achieve during the next few decades.  In contrast, the NPES sets more specific poverty reduction targets.  The TAS is a means to coordinate the efforts of GoT with those of the international community in order to reach these goals.  Meanwhile, the Medium Term Expenditure Framework and Public Expenditure Review are important processes enabling Government to prioritise and track the impact of pro-poor public expenditures.

In 2000, Government produced a Poverty Reduction Strategy Paper (PRSP).  It was subsequently approved by Parliament and endorsed by the Executive Boards of the World Bank and IMF.  The PRSP is narrower than Vision 2025, the NPES and TAS in the sense that it covers a shorter time-span and entails more focused objectives.  In other words, Tanzania's new Poverty Reduction Strategy (PRS) is intended to be the key mechanism for coordinating practical initiatives to end mass poverty. 

3.    How can ordinary people participate in informing the PRSP?

Government’s Poverty Reduction Strategy and other development efforts depend on knowing whether or not the activities they set in motion are, in fact, improving people’s welfare, how and why.  Therefore, the Government of Tanzania recently established a Poverty Monitoring System (PMS) to provide an institutional framework for rigorous monitoring and evaluation of anti-poverty programmes.  The PMS will: 

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  Guide the timely collection, analysis and dissemination of information 
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  Enable policymakers to assess national poverty alleviation strategies, identify shortcomings and make adjustments as necessary 
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  Allow Government and its development partners to identify particularly successful initiatives so that they can be given adequate support and (if feasible) replicated  

A wide range of stakeholders have been involved in designing the PMS and ensuring that it seeks to provide a comprehensive understanding of poverty trends and their reasons.  In October 2000, a Consultative Workshop was held at the White Sands Hotel in order to accelerate creation of this ambitious System.  Amongst other important conclusions, participants decided that regular Participatory Poverty Assessment – providing “The poor’s perception of trends in poverty and impact of policy changes under the PRS” – should be conducted.  

4.    Have PPAs been conducted in Tanzania before now?

In 1994/5, the World Bank conducted a PPA in Tanzania.  It illuminated aspects of poverty and wellbeing important to poor people themselves.  It also showed how surveys can distort our understanding of poverty by papering-over the unequal access to economic and non-economic resources experienced by individuals in the same household.  Indeed, findings from this PPA contributed to growing recognition of poor communities and households as heterogeneous units whose members face an array of circumstances demanding a range of policy responses.     

The 1997 Shinyanga PPA worked in a single region.  It built the capacity of local government staff to engage in participatory planning and provided key information for a Human Development Report.

Both these “First Generation PPAs” were designed to collect information about the nature, causes and consequences of poverty from the perspectives of poor people.  They did this well and have provided policymakers with essential information about the complexity, seasonality, etc. of poverty in Tanzania.  Unfortunately neither PPA was designed as a comprehensive process to inform and influence national policy. As a result their impact was limited.

5.    Why should we conduct more PPAs in Tanzania?

There is still much to learn from PPAs.  Indeed, many basic questions remain unanswered.  Moreover, we need to understand the changing causes and consequences of poverty – research goals the PPA methodology is particularly well suited to pursue.  Thus, the 2000 PRSP stated that:

“The integration of a regular PPA in the PRSP monitoring system... will provide invaluable qualitative data, which will serve to cross-check quantitative data, help us judge the effectiveness of policy measures and more generally help us understand the causal links between the action programmes of the PRSP and changes in poverty.  But most importantly, it will help us listen to the concerns, perceptions and opinions of the poor themselves.”

and the Vice President’s Office explained that PPAs should allow:

“the poor themselves to express their views on how poverty is evolving, what the causes are behind changes in the level and nature of poverty and how different policies and strategies are having an impact on the poor. The data and information coming out of the PPAs will be invaluable to put the quantitative data in context and to enhance our understanding of them”

In sum, the Government of Tanzania hopes that PPAs will improve policymakers’ understanding of poverty and the outcome of poverty alleviation activities as well as open-up political processes by involving ordinary people in the decisions that affect their lives. 

In the context of a comprehensive, sustained process to inform and influence national policy, this new generation of PPAs will do all this and more. 

6.    What does the Tanzania PPA Process look like?                       

6.1    Organisational Arrangements

The National Poverty Monitoring System is led by an inclusive Steering Committee composed of representatives from government, the private sector, civil society, and the academic/research community.  Technical Working Groups have been established and given responsibility for directing activities under the PMS.  Thus: 

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  The Working Group on Surveys and the Census (led by the National Bureau of Statistics) is establishing a multi-year household survey programme that will provide data on an annual basis for poverty monitoring   
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  The Working Group on Routine Data Collection (led by the President’s Office - Regional Administration and Local Government) is improving the routine data collection systems of local authorities and sector ministries, as well as collating their information outputs 
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  The Working Group on Research and Analysis (led by the President’s Office Planning and Privatisation) is co-ordinating research and analysis of poverty issues to inform the PRSP.  This entails working with an array of stakeholders to set research priorities and ensure high quality investigations.   This Group is also responsible for overseeing implementation of the Participatory Poverty Assessment process   
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  The Working Group on Dissemination and Sensitisation (led by the Vice President’s Office) is developing and spearheading a strategy for the effective dissemination of findings from the Poverty Monitoring System 

The Research and Analysis Working Group is responsible to the PRS Technical Committee for the successful implementation of PPAs.  In order to meet its obligations, the Working Group has formed a PPA Steering Committee to oversee and guide the PPA Process as executed by the Macro-Economy Division of the President’s Office, Planning and Privatisation.   

Participants in the 7^th March PPA Stakeholders’ Workshop recommended that, while the process should be executed by a Government Agency, it should be implemented by a Consortium including:

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  Non-profit academic & research institutions
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  National non-governmental organisations
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  International non-governmental organisations

These same stakeholders recommended that the Lead Implementing Partner be a non-profit research or academic institution.  On the basis of this recommendation, the PPA Steering Committee initiated a rigorous, transparent selection process.  Together with several external evaluators, it ultimately chose the Economic and Social Research Foundation (ESRF) to be the Lead Implementing Partner for the 2002/3 PPA.  

Immediately afterwards, the Steering Committee met with ESRF to review applications from other institutions interested in joining the Implementing Consortium.  Their deliberations culminated in the selection of fourteen Implementing Partners (IPs), namely:  

1. 
   
   The President’s Office, Planning and Privatisation (PO-PP)
2. 
   
   The Ministry of Finance (MoF)
3. 
   
   The National Bureau of Statistics (NBS)
4. 
   
   Christian Social Services Commission (CSSC)
5. 
   
   Concern for Development Initiatives in Africa (forDIA)
6. 
   
   Maarifa ni Ufunguo
7. 
   
   The Pastoralists and Indigenous NGOs Forum (PINGOs Forum)
8. 
   
   The Institute of Development Studies (IDS), University of Dar es Salaam
9. 
   
   Women’s Research and Documentation Project (WRDP)
10. 
    
    ActionAid, Tanzania
11. 
    
    The African Medical Research Foundation (AMREF)
12. 
    
    CARE International, Tanzania
13. 
    
    Concern Worldwide, Tanzania
14. 
    
    Save the Children, UK

6.2    Objectives

The first Stakeholders’ Workshop for the PPA Process was held 7^th March 2001 in the Courtyard Hotel, Dar es Salaam.  Representatives from Government, donor institutions and civil society organisations attended, discussed and debated the shape to be taken by the PPA Process in Tanzania.  Their conclusions, in combination with Government’s prior expectations, led to the formation of specific goals.  These are: 

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  Enhancing, through in-depth description and analysis, research participants’ and policymakers’ understanding of key poverty issues 
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  Exploring the (a.) different and sometimes competing priority needs of poor people, (b.) likely impact of policies and (c.) tradeoffs and potential compromises between diverse interests in order to develop ‘best bet’ recommendations for poverty alleviation 
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  Facilitating the constructive engagement of civil society in pro-poor policymaking processes

These goals will be refined and supplemented throughout the PPA Process.

6.3    Subject Matter

Each PPA Cycle will focus on a particular subject matter, or “Research Theme,” strategically selected to contribute timely information to key policy debates.  

In June 2001, the R&AWG commissioned a study to identify national-level priority research needs.  This study, entitled Towards a research framework for poverty monitoring in Tanzania, consulted stakeholders and assessed key poverty oriented policy documents.  It concluded that there is especially great need for research on “vulnerability” due, amongst other reasons, to its immense impact on people’s well-being and capacity to rapidly erode improvements made by the PRSP.

On the basis of the methodology’s unique strengths, the R&AWG decided that the 2002/3 PPA should concentrate on this very important Theme.  Priority Research Topics (i.e. broad issues) and Items (i.e. specific subjects) were selected through an inclusive Stakeholders' Workshop conducted on 4th February.  

6.4    Research Sites

On Tuesday, 5^th February, the Implementing Consortium for the 2002/3 Participatory Poverty Assessment (PPA) convened a full-day workshop with multiple stakeholders to select “site-areas” (i.e. districts where communities with particular characteristics can be found).  In coming months, Research Teams will visit these districts and – together with Local Authorities – identify appropriate communities for fieldwork.

In light of the Tanzania PPA’s policy role, site-areas were not chosen to illustrate “worst-case scenarios.”  Instead, they were selected to be broadly representative of the diverse circumstances, opportunities and challenges faced by ordinary Tanzanians.  Of course, it is immensely difficult to try capturing something of this diversity in a relatively small number of sites for intensive study.  Indeed, hard choices have had to be made. 

In order to make the best possible choices, Workshop participants formed teams with special expertise around the basic livelihoods supporting communities in Tanzania.  Each team then identified and prioritised the most significant variables of diversity vis-à-vis vulnerability and their assigned livelihood category.  Thus, for example, the variable “Reliable Rainfall” was prioritised by the team responsible for Farming-based Livelihoods but not by the team looking at Urban-based Livelihoods. 

These activities led to the creation of distinct “diversity trees” for:

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  Urban-based Livelihoods
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  Fishing-based Livelihoods
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  Livestock-keeping Livelihoods
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  Farming-based Livelihoods

In some cases, it was relatively easy to then identify sites featuring all the key elements of diversity along a given branch/priority pathway.  In other cases, identifying the most appropriate site has been much more difficult.  The PPA Management Team, therefore, met with additional specialists to confirm the selection and sequencing of some variables and seek further advice on site areas.  This process culminated in the following list of thirty site-areas: 

Bagomoyo District Chunya District Dodoma Rural Handeni District Igunga District Ilala District Iringa Urban Kibondo District Kigoma Rural Kilosa District Kinondoni District Kyela District Lindi Rural Mafia District Makete District

Manyoni District Mbulu District Mbulu District Meatu District Muleba District Mwanza District Newala District Njombe District Nkasi District Rufiji District Same District Simanjiro District Songea Rural Tanga Urban Tarime District

(Click here to see where these sites - marked in green - are located in Tanzania.)  

6.5    Timing

PPAs will be implemented in two-year long “cycles” calculated to feed into the PRSP and other policy review processes.  The first of these cycles began in January 2002 with an intensive Training Programme in Participatory Policy Research, conducted by the Institute of Development Studies, University of Dar es Salaam and Development Research and Training (DRT), a Ugandan NGO.  Fieldwork began on 4th March, 2002 and will continue through mid-July.

From July through December 2002, the PPA will undertake further analysis and write-up its research results.  This period will lead to the production of a National Report and an as of yet undetermined number of focused policy briefing papers. 

The entirety of 2003 will be dedicated to encouraging and facilitating the practical use of research results by policymakers and to preparing for the next cycle of research in 2004.

VICOBA and SPM Training Methodologies.

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

2.1.1.1 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.

2.1.1.2 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

2.1.1.3 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.

2.1.1.4 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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