VILLAGE COMMUNITY BANKING

Village Community Banking (VICOBA) is a micro-finance programme that enables community members to pool their savings and take out loans from one another. These loans can be used to found small businesses and collective farming initiatives, the income from which can be reinvested into the community bank.

The goal of VICOBA is to fight poverty while empowering rural communities to take charge of their own development. Loans are issued based on the contribution of members, who also set the groups' internal regulations. The programme helps participants gain financial management and business development skills, as well as teaching them about marketing, value addition, resource identification and community ownership.

Sajida Cyrilo feeding her goat, which she bought for herself after taking out a VICOBA loan.

Mama Conchesa selling Thailand aubergines at Nyakahama open market.

Thanks to its affordable interest rates, VICOBA reduces the financial burden that would come with external loans. VICOBA groups can also use their savings to cover medical insurance, school fees and hospital bills. On an individual level, the programme enables members to improve their income and achieve their economic objectives, while promoting a sense of togetherness and ownership of group projects.

VICOBA is a well-established tool in Tanzania, and is present in many African nations under local names such as Jenga (Uganda), Ophivella (Mozambique), table banking (Kenya) and Josaca/kikundi (Zanzibar). For DSI in the Muleba district of Tanzania, VICOBA is a way of ensuring project sustainability, as income can be reinvested into the existing micro-businesses. These businesses can continue to monitor and follow through on each project once the initial round of funding is over.

Sources

To read more about VICOBA, visit the following web pages:

https://www.linkedin.com/pulse/explainer-vicoba-amina-haighai-/

http://kitegacc.org/campaigns/village-community-banking-vicoba/