The Contribution Of Village Community Banks To Income Poverty Alleviation In Rufiji Delta

ABSTRACT

Village Community Banks (VICOBA) play an important role of enabling the poor save and access credit. Specifically, the current study aimed at identifying factors influencing VICOBA activities in alleviation of income poverty; identifying major challenges facing community participation in VICOBA activities; examining the effectiveness of VICOBA in alleviation of income poverty and determination of the community‟s attitude towards VICOBA. The study used a cross-sectional research design whereby 188 respondents were randomly selected. Primary data was collected using a questionnaire, focus group discussions and key informant interviews. Quantitative data was analyzed using SPSS where means, frequencies and percentages were determined. In addition, a regression analysis was done to determine the contribution of the independent variables on alleviation of income poverty; t-test was also used to determine variation between groups. Results show that most of VICOBA members joined the scheme in order to access credit and they acknowledged to have benefited as per their expectations. Findings also show distance to markets hinders the progress of VICOBA members‟ income generating activities. Results further show that attitude towards VICOBA activities in the study area was favorable. Based on these findings it is recommended that the government work out a modality to ensure the increased coverage of this unique rural development model; by reviewing its microfinance policies that focuses on the freedom and ownership of the scheme by members themselves. This study recommends to the rural communities that they embrace the scheme in order to raise the necessary investment capital, acquire entrepreneurial knowledge and skills and start IGAs without having to rely on external support.