Background on the VICOBA
The VICOBA project was originally inspired from FCF’s increased focus on programs which have a direct link to conservation and facilitate local empowerment. In mid-2009, FCF started this new program to establish Village Community Banks (VICOBAs) in 6 communities near the Moyowosi Game Reserves.
VICOBAs are savings and microfinance groups that target low-income community members to encourage saving and provide access to microloans for small enterprise development.
In rural Tanzania, there are few individuals that have access to formal credit or that are able to save for the future. Rural communities rely on savings in the form of food crops and livestock that they often have to sell to meet their needs. Consequently, providing a safe structure that encourages saving and providing access to microloans are both very important to the financial security and economic empowerment of rural Tanzanians.
The concept of VICOBA savings and credit groups has developed out of the microfinance movement. This concept has proved to be a highly successful tool for empowerment and poverty alleviation as well as a forum for environmental advocacy and eco-friendly enterprise initiatives. The VICOBA system provides an opportunity and a support structure that fosters self-help initiatives that encourage the poor to break out of the cycle of poverty by utilizing their own resources.
VICOBA groups are comprised of approximately 20 to 40 community members who voluntarily join. Though the program is open to all community members, the target participants are those that are struggling financially and would not otherwise be able to save or access credit from the formal banking sector.
VICOBA members meet weekly to buy shares in the community bank. Members decide on a share value, usually around $1, and each member is permitted to buy up to three shares each week. As the collection of funds grow, the group starts to disburse small, short-term loans to its members for the purpose of strengthening small enterprises.
In the VICOBA system, there are strict rules and procedures and a very strong ethic of discipline. This structure helps to ensure the transparency and accountability of the system. The checks and balances procedures help to ensure that it is virtually impossible for funds to be misused.
Update on VICOBAs from FCF’s Community Development Manager
During his recent travel to the Moyowosi and Ugalla areas, FCF’s Community Development Manager, Elliot Kinsey, had the chance to visit several of the VICOBAs that FCF helped to establish. FCF is particularly excited and encouraged about this project because it is having impressive impacts in the lives of individual community members across these areas.
The groups have grown impressively independent of any external financial assistance and several are circulating over $6,000 in microloans to their members. FCF is continuing to support the groups through technical guidance and training and we are looking for ways to build capacity and encourage growth. In the coming years, we hope to expand the program in additional areas.
Kinsey was delighted to find that the VICOBA groups continue to do very well without much guidance from FCF and that the members continue to be excited by the benefits they receive. Kinsey was particularly inspired by the stories of the individual men and women that have benefited from the establishment of the VICOBAs. Prior to the establishment of the VICOBAs, several individuals were never able to save any money. Now, these same people are saving money each week. They also have access to loans which have enabled them to build houses, send their kids to school, and increase their small business running capital from less than $10-100 up to and over $1000. The VICOBA system is truly proving to be an instrument of change for those who choose to join and participate in the program.
The VICOBAs have also helped to raise awareness about the benefits of conservation. Prior to the establishment of the VICOBAs, many communities only knew of FCF’s anti-poaching and law enforcement activities. FCF’s involvement in the establishment of the VICOBAs is helping to establish new positive perceptions between the communities and FCF.
We look forward to sharing more updates on this program very soon!