Evolution of village community bank groups in Matombo Ward - Morogoro Rural District

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Southern New Hampshire University
Village Community Banks (VICOBA) was established in 2003 by District Road Support Program-DRSP to respond to the peoples' problem of income poverty. This scheme is run in a transparent manner and in solidarity by savings and attend capacity building. The objective of VICOBA was to improve living standard of communities along the road corridor, by enabling them to have their own source of capital, which will enable them to establish income-generating activities and maximize the benefits of improved roads. With direct actions that targeted the poor, DRSP enabled the poor to take advantage of opportunities of improved roads by facilitating access to new economic opportunities. The baseline data conducted before the program was established showed that, the economic conditions were very poor (below Tshs 9000 per month), which did not meet all the basic needs necessities and makes savings for investment. The evaluation of beyond road project showed that, after one year the income has improved from Tshs 9000 before the program to 30000 per month. Moreover group members managed to distribute profit of an average of 150,000 Tshs as profit, and remained with some amount to start a new cycle.Therefore savings are among the most important aspects to investment. To come out of income poverty one needs savings to invest in income generating activities. VICOBA program offers beneficial financial services for low-income people and the capacity of managing scarce household and enterprise resources more efficiently, protection against risks, provision for the future, and taking advantage of investment opportunities, for economic returns. (Author abstract)