Contribution of Village Community Banks to Members’ Livelihood Outcomes in Tanzania: A Case of Chang’ombe Ward in Temeke Municipality

Abstract

This paper assesses the contribution of Village Community Banks (VICOBA) to members’ livelihoods. Specifically, the paper examines the factors for membership in Village Community Banks and the contribution of VICOBA to the livelihood outcomes of members. The paper is based on a cross-sectional study whereby a sample of 224 respondents was drawn from the population using simple random sampling;112 were members and 112 were non-members of VICOBA. Non-members of VICOBA were used as a control group. The method of data collection was a survey. The data were analysed by computing descriptive and inferential statistics. Descriptive statistics included calculating frequencies and percentages, while inferential statistics included means comparison. The results indicate that services offered by VICOBA were determinants of membership in VICOBA, which included access to loans, networking, receiving earnings, a lower interest rate, savings, and a source of capital. VICOBA contributed to livelihood outcomes variables such as net income and SMEs value of members as it showed a statistically significant P ≥ 0.05 meaning that members of VICOBA had higher net income and Small and Medium Enterprises (SMEs)value compared to non-members. Also, livelihood outcomes such as TV set value, health service cost, and house value of members of VICOBA showed higher values compared to non-members as it showed statistics significant of P ≥ 0.01. The findings conclude that there is a strong positive relationship between membership and livelihood outcomes. The study recommends that local district authorities, NGOs, and the ministry responsible for community development to promote members of the community to participate in VICOBA through developing appropriate policies as VICOBA has shown a tool for achieving livelihood outcomes and means of financial inclusion by enabling members to access capital at affordable costs.