Accessible Opportunities In The Operations Of Vicoba Groups In Tanzania: A Comprehensive Review Of Literature

Accessible Opportunities in the Operations of Vicoba Groups in Tanzania: A Comprehensive Review of Literature

Godcryson P. Massawe

Assistant lecturer, Tengeru Institute of Community Development (TICD)

DOI: https://dx.doi.org/10.47772/IJRISS.2025.90900092

Received: 21 August 2025; Accepted: 28 August 2025; Published: 30 September 2025

ABSTRACT

Since its introduction in 1991, the Village Community Banks (VICOBA) has significantly impacted livelihoods in Tanzania, contributing notably to poverty reduction at both community and individual levels. This study provides a comprehensive review of research conducted from 2011-2025, focusing on the accessible opportunities in VICOBA groups across various regions of Tanzania. A total of 25 studies were analyzed, including 12 master’s theses, 10 peer-reviewed journal articles, 1 project report, and 2 books. The review identified six key opportunities provided by VICOBA: access to credit, educational benefits, leadership development, political engagement platforms, social protection, and savings opportunities. However, findings indicate that only 83.3% of these opportunities are fully accessible, while 16.7% which represents health insurance services seized due to unspecified reason. The study underscores the need for strategic support and targeted policy interventions to safeguard and enhance the effectiveness of VICOBA. In particular, reducing political interference in the daily operations of VICOBA groups is crucial for sustaining their role in fostering socio-economic development in Tanzania.

INTRODUCTION

VICOBA group is a voluntary group formed with the maximum number of 30 members voluntary joined to achieve their common goal (Ngalemwa, 2013). VICOBA groups are guided by regulations, procedures and by-laws formulated by their own members, and therefore promoting the sense of ownership (Mponzi et al., 2023). The members within the group are divided into sub-groups of five people to work as each other‘s referees when someone wants to take a loan, which together with the savings works as a collateral instead of other assets (Lushakuzi et al., 2017). The institutional structure of VICOBA is made up of the Chairperson, the Secretary, the Treasury, Money counter, Key holders and Discipline master; all of them should ensure group survival is attained and maintained (Lucas & Akaroo, 2016). VICOBA groups use a lockbox with three locks and three keys to keep the money and other important documents (Sharma & Zhao, 2017). VICOBA groups as VSLA has a significant positive association with improvements in household diet, health, children’s education, and women’s involvement in household decisions (Beyene & Dinbabo, 2019).

The credit federation  SANASA, a Sri Lankan NGO which has seen it as its mission to sustain a culture of inclusiveness, such that 52% of the members are reported to be below the poverty line (Muganda, 2016). The culture of SANASA is extremely participatory, with the accounts posted on the office walls and open meetings. Each member society is run by its own members and depends almost entirely on its own money for its loans. High repayment ratios are maintained by a sense of ownership and group solidarity (Amarasiri & Priyanath, 2023) (Priyanath & Jayathma, 2023). SANASA brought a significant contribution to poverty alleviation and empower the members in economic, social and political spheres including access to credit, establishment of businesses, increased entrepreneurial skills and changes in consumption patterns as well as access to quality health care (Cornuel et al, 2024) (Sivachithappa, 2013).

In 1991 VICOBA was initiated by CARE International in Niger, Zimbabwe, Mozambique, West Nile Uganda and Eritrea. The background of acronym is a CARE international model known as Mata Masu Dubara (MMD), which was developed in Niger, West Africa. MMD was drawn from from the local Nigerian women language for getting themselves out of poverty. In Mozambique, MMD was known as OPHIVELLA, in Uganda identified as JENGA while in Tanzania it known as VICOBA (Dyanka, 2020) (Sumari, 2018). Moreover the microfinance groups in different part of Kenya including groups of VICOBA enhance its members with capital, education and even social protection through accessing health insurance services (Shakir, 2022).

The Village Community Bank (VICOBA) model was first introduced in Mozambique, Zimbabwe, Uganda, and Eritrea before being adapted for Tanzania by SEDIT staff. It was launched in Zanzibar in 2000 and expanded to the Mainland in 2002, with key support from SEDIT, CARE International, and the World Conference on Religion and Peace (Muganda, 2016). CARE Tanzania initially introduced the model through the Jozani-Chwaka Bay Conservation Project, and it was later adopted in Pemba Island and other mainland projects (Ismail, 2023). Today, about 16% of Tanzanians are members of over 50,000 VICOBA groups, collectively managing TZS 1.5 trillion and serving 4.4 million clients (Magali, 2021). However, the absence of a centralized platform for sharing VICOBA group related information continues to limit visibility, making it difficult for potential members and external stakeholders to discover, engage with, or support these groups effectively.

METHODOLOGY

The study used comparative analysis of existing data to analyze the existing data sets and information related to operations of VICOBA groups from various regions in Tanzania to reveal the accessible opportunities. Comparative methods are used to find out the most accurate literature on research issues as well as reliable sources of information from the internet (Tien & Ngoc, 2019). The method collect secondary data based on available reliable resources by ensuring the data collected are clear, consistent as well as accurate with research topic. If similar patterns emerge consistently, it adds credibility to the conclusions drawn, reinforcing the robustness of the research results.

Table 1.0

Source: Research design, 2025

The findings of this study were obtained through reviewing various literatures of relevant information on the accessible opportunities in VICOBA groups of Tanzania. That means, several credible sources with a total of 25 publications with relevant to the subject matter were identified in the literature reviewing process. These resources were collected from various platforms, including Google Scholar, Open Access Repositories, and JSTOR. The keyword used in this study was “Accessible opportunities in VICOBA groups of Tanzania” to facilitate the identification of materials relevant to the nature and scope of the study. That means those studies conducted in Tanzania specifically those align with the target of this study were included while those even from Tanzania or any other developing countries were excluded. The literature materials collected from 2011 to 2025 containing information on the accessible opportunities of VICOBA were systematically included in the analysis to ensure the currency and relevance of the literature. Moreover, both qualitative and quantitative date were included in this study. Eventually, 12 master theses 10 journals, 1 project report and 2 books, making a total of 25 studies, conducted in Tanzania within a total of 14 years, were assessed to reveal the similarities and variations in the findings.

RESULTS AND DISCUSSION

Savings

Shares and Social fund contributions

Members of VICOBA groups are required to make regular financial contributions that serve as capital for both the group’s operations and the members’ benefit. These contributions fall into two main categories: share contributions and social fund contributions (Leo, 2020). Both types of shares are collected on a weekly basis during scheduled group meetings (Shindika, 2021). VICOBA members typically meet every seven days, and during these weekly meetings, contributions are made consistently. This routine not only helps to build group capital but also reinforces member discipline and group cohesion. (Stillman, 2018; Kimiti, 2017).

Borrowing platforms

Interest bearing loans and Interest free loans

Village Community Banks (VICOBA) offer opportunities that enable members to access both interest-bearing and interest-free loans (Kawiche, 2019; Kimiti, 2017). Interest-bearing loans are linked to members’ share contributions and are commonly referred to as business loans. In contrast, interest-free loans—often called emergency or community fund loans—are associated with contributions to the social fund.

While members are allowed to access both types of loans simultaneously, they are not permitted to hold two community fund loans at the same time (Kilanga et al., 2024). Interest-bearing loans in VICOBA are typically offered under flexible conditions, as they do not require physical collateral (Luvinga, 2025) (Rwela, 2023) . Instead, VICOBA groups rely on social collateral through strong group cohesion. Members guarantee one another within small sub-groups containing five (5) people known as sumaku, which translates to “magnet” in English which works as a collateral instead of other physical assets (Kishe, 2018) (Magalisha & Zakaria, 2016) (Kitomari & Abwe, 2016). VICOBA members testified the benefit they get from as one woman from Kasi Mpya Group in Ngofila village as revealed by (Rutenge, 2016) said;

“….I have benefited a lot being a member of VICOBA. I get loans of affordable interest and invest in small business. The small business has enhanced me to renovate my house. My family is protected from disturbance by rainfall and sunshine. Thanks VICOBA, I advise other community members to join into VICOBA so that they can improve their wellbeing……..”

Educational platform

Members of VICOBA groups benefit from a variety of educational opportunities through training programs introduced as part of capacity-building efforts. Entrepreneurship training is commonly provided to empower members to start or improve their income-generating activities (Kilamlya & Utonga, 2024). Beyond economic empowerment, VICOBA also serves as a platform for broader community education, including health awareness initiatives (Mponzi et al., 2023). Educational opportunities within VICOBA groups have expanded to include financial literacy, business management, family planning, driving courses, and advocacy training. These initiatives have significantly contributed to the personal and professional development of members (Massito & Ismail, 2025) (Redson & Magali, 2022) (Ndugumchana, 2021) (Magali, 2021).The study conducted by Leo ( 2020) reported the 52 years old female respondent from Katerero ward said that:-

“Financial education has awarded me with incredible on savings, deposits, loan borrowing and repayment skills, skills I did not have before joining the Bethania VICOBA”

Leadership development

VICOBA groups operate under a structured leadership system comprising various positions, including chairperson, secretary, treasurer, money counters, key holders, and a discipline master (Ndugumchana, 2021). These leaders are elected by group members, and the overall performance of VICOBA groups is closely linked to the quality of their leadership. As a result, various training programs are conducted to build leadership capacity, ensuring that leaders are committed, competent, and accountable (Luvingo, 2023). Regular VICOBA meetings serve as a platform for members to develop and practice leadership skills. Additionally, leaders often participate in mentoring seminars and workshops covering a range of developmental topics, including leadership and management, financial control, and even political engagement (Ndugumchana, 2021) (Adelusi, et al., 2018)  (Meena et al., 2017).

Political matters

Some VICOBA groups have been formed or utilized for political purposes on various occasions (Faru, 2025). A study by Kjær et al. (2024) found that several VICOBA groups operating in the Mchikichini market near Kariakoo in Dar es Salaam collectively protested against the market leadership. As a result of their coordinated efforts, the leadership eventually agreed to reduce electricity fees. Moreover, politicians often make financial contributions to such groups during election campaigns, as it is more effective for them to mobilize and influence individuals who are already organized into groups rather than those who are scattered (Ivanchenko & Banshchikova, 2018). Now, according to the research conducted by Aku et al., (2023) noted that:-

“Most groups are formed based on political events. For example, during the election campaigns, campaigners would promote group formulation for political reasons. These groups normally dissolve or become dormant after the election.”

Social protection

Membership in VICOBA groups qualifies members to access social insurance services. One notable initiative was the “KIKOA” scheme, introduced under the NHIF Mutual Plan through the CHF and iCHF, which offered health insurance packages specifically designed for informal worker groups with 20 or more members. Thanks to its relatively affordable premiums, the scheme attracted various types of informal associations, including VICOBA groups. Launched in 2015, the scheme was discontinued at the end of 2019 due to challenges related to adverse selection (Riisgaard et al., 2022). Not only insurance services also support from group members during tragedy incidences such as loss of beloved one as it was noted that:-

“If you have lost your beloved ones (wife, kids, father and mother) i.e. only these four categories of people, as a group we provide TZS 500,000 and every member contributes TZS 30,000 on top of that.” (FGD respondent, Dar es Salaam)

CONCLUSION

The comprehensive analysis conducted in this study reveals that VICOBA (Village Community Banks) groups in Tanzania offer a wide range of opportunities that members can access to initiate or enhance income-generating activities. These opportunities contribute significantly to the economic and social improvement of individual members, their families, and the wider community. However, it is important to note that while many of these opportunities have had a positive impact, some are short-term in nature, and others pose potential risks to the sustainability of VICOBA groups.

For instance, the discontinuation of the health insurance services—once a key form of social protection offered through VICOBA—about six years ago has left many members uncertain and vulnerable. Despite the need, most members are unable to afford or access current NHIF (National Health Insurance Fund) packages due to their financial limitations. Therefore, there is a need to reconsider and revive this opportunity, which holds significant value and potential for members, as most of them come from middle- and lower-class communities. Reviving this opportunity would help ensure both physical and mental well-being, as has been demonstrated in other regions, including the neighboring country, Kenya.

Furthermore, the increasing politicization of VICOBA groups poses a threat to their inclusivity and long-term viability. The tendency of some politicians to use these groups as tools for political gain undermines their neutrality and discourages participation, especially among members who do not affiliate with any political party. Moreover, political differences can significantly influence group decisions, with some being swayed to serve political interests rather than the collective goals of the group. In such situations, conflicts of interest have emerged within some VICOBA groups, leading to prolonged, unresolved disputes that eventually result in the collapse of the groups.

In light of these findings, there is a clear need for strategic support and policy interventions to ensure the sustainability and integrity of VICOBA groups. Strengthening long-term social protection measures and safeguarding the groups from political interference will be crucial in unlocking their full potential as drivers of grassroots economic development in Tanzania. Further studies could also focus on the implications of digital technology on the performance of VICOBA groups.

Disclaimer (Artificial Intelligence)

Author hereby declare that NO generative AI technologies such as Large Language Models (ChatGPT, COPILOT, etc) and text-to-image generators have been used during writing or editing of this manuscript.

Conflicts of Interest 

Author of this study declared no conflicts of interest concerning publication the of this article.

ACKNOWLEDGEMENT

The author express his appreciation to the Tengeru Institute of Community Development (TICD) in Arusha for providing them with the necessary resources to conduct this study.

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