Village Community Banks (VICOBA) in Socioeconomic Development in Tanzania: The Only Game in Town? A Case of Selected Areas in Dar es Salaam

Abstract

The increased socioeconomic life challenges in urban settings have led to the formation of informal bonds which aim to ensure the survival of individuals and their families. Those efforts have accelerated the need to have a system of accommodating the social groups that operate informally but significantly engage in improving socioeconomic living conditions of poor urban communities. In order for informal established groups to align and collaborate, have put in place a diverse management system with established rules and regulations has been put in place. This study sought to examine the contribution of Village Community Banks (VICOBA) to socio-economic development at the individual and family levels. The study conducted a social survey among sample residents of Toangoma Ward in Temeke Municipality and Gongo la Mboto in Ilala Municipal Council. The study employed mainly quantitative methods and the data gathered was analyzed using descriptive statistics to generate frequencies and percentages. The study has found that educated and uneducated, teachers and street vendors, believers and atheists, politicians and food vendors all participated in VICOBA activities. The main reason for the popularity of VICOBA is the nature of their voluntary saving and collateral free loans. The study has found VICOBA to be very helpful in promoting the socioeconomic development of members and their communities as well. It is thus recommended for the government and other stakeholders in social sector development to promote self-help groups as a solution for transforming the socioeconomic status of poor communities in both urban and rural areas.