CHAPTER FOUR

PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS

4.0 Introduction

This chapter presents findings and analysis of the data obtained from the field on the contribution of VIKOBA to the income of the women in pert trade, a case study Mtwara Mikindani Municipality. This study involved 50 respondents; 40 are the community members, 9 executive officers, and 1 District executive officer. The former respondent was reviewed and the latter were given questionnaires to fill in. This chapter is divided into two main sections namely, characteristics of respondents and the actual data analysis.

In order to test the validity of the problem the data analysis was guided by the following objectives;

To find out the benefit of VICOBA to the individual and socio economic development in Mtwara Mikindani.
To assess the problems facing VICOBA to the income of the women in pert trade
To seek solutions that can eliminate the problem facing people participating in VICOBA

4.1. Characteristics of respondents

Table 1.characteristics of respondents (N=45)
Category	Group	Frequency	Percentage
Age	18-25	15	30
	26-35	30	60
	35-above	5	10

Sex	Female	35	70
Sex	Male	15	30
Education Level	None educated	4	8
	Primary level	25	50
	Secondary level	10	20
	Diploma	8	16
	Bachelor	4	8
	Others	1	2
Marital Status	Single	20	40
	Married	25	50
	Divorced	5	10

Source:Data from the field, 2015

4.1 Respondent’s Socio-Economic Characteristics

Table 1 shows the distribution of respondents according to their personal characteristics of age, sex, marital status and education level. Age is an important demographic variable and is a primary basis of demographic classification in vital statistics, censuses and surveys (URT, 2005b). Age structure of a population is a reflection of population dynamics in the past. Age affects the future growth of the population and its structure changes in the future (URT, 2006). This shows that, all respondents were above the age of 18 years and they were capable of responding to questions accurately. This can be due to the fact that older people are less active in production and other activities as compared to more active young people (Nanai, 1993). Moreover most of the VICOBAs by laws requires member to be 18 years and above.

Most (70%) of the respondents were women and just over two fifths (30%) were men (Table 1). These results concur with Kihongo (2005) who observed that most men do not want to join VICOBA, because it takes a long time to start acquiring loans, the loans provided are not enough for business capital and others argue that they are woman based projects. According to Kihongo (2005) as pointed earlier in section 2.9 men argued that, women are more patient with the entire requirement including the waiting time needed to initially access the loan. Such patience is not very common among men. However, researchers and practitioners generally agree that the poorest of the poor particularly poor women are yet to benefit from micro-finance programs in most countries partly.

Education is regarded as a key to better opportunities for employment, accessibility to information, services and independent and correct actions with regard to survival and development (Nkurunzinza, 2006). Furthermore, education tends to stimulate self confidence and self reliance. Moreover, education is important in adapting to business skills and strategies which will lead to improved household prospects. This is precisely because education normally has a significant influence on a household’s income strategies, land management and labour use (Nkonya et al., 2004). Table 1 summarizes results of respondents‟ education level and it shows that about half of the respondents (50%) had primary school education. About 8% of respondents had no formal education, and only 20% had Secondary school education. The results suggest that the majority of the respondents in the study area had modest level of education that is primary education; nonetheless this can enable them to adopt extension services packages which could enable them to adopt innovations. The results concur with Handley et al. (2009) who reported that education is an important parameter in relation to human capital which can be used to reduce inequality and poverty and also for laying the foundations for sustained economic growth, effective institutions and sound governance. According to Owen et al. (2005) being knowledgeable of something increases the ability to control ones livelihood.

The findings in Table 1 also indicate that, the respondents differed with regards to their marital status, where by just over a third (50%) of respondents were married, under a quarter (40%) were single, 10% were divorced. According to Maselle, (2009) marriage is a factor that is closely related to poverty or welfare of households. Katunzi (1999) reported that marriage patterns play an important role in shaping social organizations as they associate with many socio-economic, cultural and demographic variables. Phillip and Abdillahi (2003) observed that married couples show a high level of participation in community development activities probably due to cooperation amongst them in the marriage institution and in the society. According to Cronin (2002), the diversity of respondents in the study area can help to get diverse information from people of different life experiences and knowledge. The higher proportion of the married couples within VICOBA members may suggest that they have big responsibilities to their families therefore, the need to join VICOBA so as to overcome the situation.

4.2 The benefits of VICOBA to an individual and society to socio economic development in Mtwara Mikindani.

What are the benefit of VICOBA to the individual and socio economic development
Themes		Frequency	Percent %
	To improve living standard of people in the community.	40	80

	To improve small business venture	30	60

	To acquire loans of low interest rate.	35	70
	To buy plots for farming and building houses.	40	80

4.2.1 To improve living standard of people.

The table no. (2) Above the study discovered that many of respondent contributed about the 80% said the contribution of VICOBA toward improving life standard of people and the good way of getting loans for low rate interest.

Also the finding of this study show that VICOBA proved to be successful to encourage saving and provide micro-loan for the rural communities. Observations from the current study from the respondents who were also VICOBA members pointed out that they have benefited from VICOBA. Results from the field study show that more than half (52%) of respondents who were VICOBA members have benefited by getting loans for their IGAs. Access to the loans may lead them to improve their living conditions due to possibilities of increasing their incomes. For example, 11% were able to send their children to school. These results were also viewed with Mkombe (2005) who observed that, savings facilities of village community bank (VICOBA) reduce need to borrow from money lenders at high interest rates, and this enables purchase of productive assets and reduce distress of selling ones assets.

4.2.2To improve small business venture.

Through the field findings show many people has improved their business venture by getting loans of low interest were 60% of respondent analyzed the benefit of having VICOBA in their community toward eradicating poverty in the area.

The access to VICOBA also improves allocation of resources, increases economic growth, and reduces household vulnerability to risks/external shocks. Lastly, they cause less volatility in household consumption. Generally, Kihongo, 2005) Hiatt and Woodworth, 2006; Ahlin and Jiang, 2008) has shown that loans provided by the VICOBA model can help the communities to stabilize and increase their incomes.

The result from the finding investigate that VICOBA have helped the poor to increase buying and investing capability, alleviate micro-business funding constraint and uplift them onto a higher economic status. It is claimed that the social benefit arising from membership to MFIs are sometimes more important than the financial benefits (Robinson, 2001), also to Mkombe (2005) micro-finance can contribute to the development of the overall financial system through integration of financial markets. A study by Cull et al. (2006) revealed that, VICOBA help to mobilize considerable resources required for economic development; moreover most of mature Village community bank provide diverse products, such as housing loans and pension. However the respondent suggests that micro-finance benefits can only be realized as long as the poor continue to be clients of VICOBA.

4.2.3 To acquire loans of low interest rate.

The findings from the field study shows many people are aware about the fund that is obtained from VICOBA toward enhancing development of Mtwara municipal people and other development, the 70% of respondent agreed about the loans of low interest has helped to rise the income because the loans help to startup the small business which contribute to the generation of income hence development of individual and Mtwara municipal council. Also the loans that obtained from VICOBA are used to send students at schools and colleges’ were the parent’s remains paying few amounts until the end of all money that has been browed from the VICOBA credit.

This was investigated from the field study that the loans provided is for low interest rate where 5% interest rate should be given for any money that is browed by member group and at the end of season like one or two years the benefit obtained is divided for every member of VICOBA hence the member increase the income through interest obtained there for every season of the year. This helps the poor people to serve money and used for the development activities like buying houses and lands for farming.

4.3 Challenges facing performance of VICOBA in the community of MtwaraMikindani municipal.

Challenges of VICOBA members in their activities Mtwara Mikindani
		Frequency	Percent %
	Lack of capital to contribute in VICOBA	40	80%
	The high rate of illiteracy to the members	35	70%

	Failure to pay back the loans on time located	30	60%
	Inheritance condition of the people	30	60%
	Low support from government	20	40%

Source: Field data, 2020

4.3.1 Lack of capital to contribute on Village Community Bank.

This was observed by the key informants who showed that 80%VICOBA members and local communities were frequently limited by lack of Capital to invest in VICOBA activities. Respondents pointed out that sometimes they failed to meet some of the basic requirements such as medical costs, clothing, school fees for their children and food in case of food shortages because of the low income as shown by the ward executive of Magomeni ward in the quotation below;

„„Our incomes are too low to meet the necessary basic needs and VICOBA activities, as VICOBA requires a member to manage a profitable small scale business and be able to repay the loan‟‟

Also Begasha (2012) assessing the impact of the VICOBA project is difficulty in the sense that sometimes loans are borrowed as required following all the formalities but, not all the borrowed money is used for IGAs activities. According to VICOBA lending, loans borrowed should only be used for IGAs.

The Village Community Banks lending model does not allow its members to take loans and spend on other things such as paying school fees. In several cases, VICOBA members would give false information especially if loans have been used on other things than agreed. Hulme and Mosley (1996) findings show that only non-poor households with an income above the poverty line can afford to borrow and benefit from taking loans.

4.3.2 Failure to pay back the loans on the time located.

The finding from the field shows (60%) members point out that poor households end up fail to pay back the loans and having debts after receiving loans. This is because the poor families fail to arrange money for development purpose while use them to spend in other activities which could not give profit back to pay the debt hence end up selling their assets like lands cattle’s and to pay back the loans to the VICOBA. During the study it was observed that most of the challenges facing performance of VICOBA are business oriented rather than to the VICOBAs per see.

4.3.3 Low support from local government.

Also this has been discussed on the field study by one of the key informants 40%, some of members in VICOBAs still focusing on donor support instead of internal capital generation. In addition, deceptive micro-finance models brought to them earlier gave rise to fear in relation to joining any other model including VICOBA. The Mtwara Mikindani geographical location is having poor soil which can support farming and agriculture which employee many people with no skills or education hence member need to get support from government rather than depend on their internal money which their contribute in village community bank.

4.3.4 High illiteracy rate to the members.

Findings from the field study analyzed that few number of people have attained the school where approximate 70% attained only standard seven. Where the education is used to liberate the person or the community by showing the good way of using the resources available. The only few people had attained Muslim education (madras a) where the women are not more considered hence live them based others and are involved in production for livelihood hence development, so the findings investigated that the education is key important about force development to the people and community.

According to one of the key informants VICOBA staff member here observed that, community sensitization in organized public meetings can be one of the major tactics used to address some of the challenges mentioned above. According to Begasha (2012) early identification of these hindrances can potentially help in the development of deployment strategies to increase the rate of success.

4.3.5 Inheritance condition of the people in community.

In addition, to the challenges highlighted above, one of the VICOBA staff member interviewed as a key informant said, “the reason why people were not joining VICOBA activities was low income and laziness, as they don’t like attending meetings every week, they use most of their time participating in cultural activities like traditional dancing”

However, findings by the study show that 60% of respondent are doing fishing practices and they do not see VICOBA as priority. The finding was confirmed by one of the key informant (VICOBA staff member) who said; “Fishers seem to have no time for VICOBA because sea whether changes may make it difficult for them to comply with VICOBA rules and regulations. And this is influenced by high rate of illiteracy rate of the VICOBA members.

4.2.4 Ways or measures to be done to overcome the challenge of VICOBA for livelihood of people in Mtwara Mikindani.

From the study done in the community of Mtwara Mikindani municipal reveled that there are many challenges that attack the development of village community bank .Although many respondent agree that the VICOBA has contributed much to help poor people improve their living condition through serving few money and get profit at the end of the seasons which help them to run other development activities in the community like buying land, starting up the small business which generate service to people and get income for development.

i. Village Community bank should not be for women only but also men should join in VICOBA because the benefit obtained can be used for all member of the society in development activities. Also the men should join the VICOBA so that to strengths them hence can become potential tool for liberating poor societies in the nation.

ii. All VICOBA visited operated at the place which is not conducive as they do not have their own building to meet so they have to meet at the house of one of the members. Sometimes the area is small to accommodate all of them, but also it is risky for the owner of the house to accommodate all of the members since people may think that the money collected are kept there and so the house owner being in the fear of being attacked by people who want to steal the money.

Apart from that it is very inconvenient to the house owner since she has to sacrifice all other activities to accommodate her peers. On the other side the banks lack land for constructing their own buildings. The situation necessitates the bank to use safe metal box for money keeping collected every week they met. Other money is kept in circulation by being borrowed to members. That box which is locked with three locks has to stay with accountant of the group. Different three members stay with the keys and it is not supposed to be opened unless it is in the meeting. This challenge makes an accountant to stay with the money but having fear of being attacked by thieves.

iii. The Government also, should enact different policies which favor the informal financial settings such as VICOBA, as the banks visited felt that the current microfinance policy in use favors the formal and semi formal financial institutions which are legally registered by the Bank of Tanzania.

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction

The chapter includes summary, conclusion and the recommendation of the study on the role of village community bank toward social economic development in Mtwara-Mikindani Municipality

5.1 Summary of the study.

Generally the main objective of the study was to assess the contribution of VICOBA to socio economic development in Tanzania .A case study of Mtwara Mikindani municipal. The study had specific objectives, which included identifying factors influencing VICOBA activities in of income toward reducing poverty, to identify major challenges facing community participation in VICOBA activities, to examine the effectiveness of VICOBA in alleviation of income poverty and to determine the community’s attitude towards VICOBA activities. The study found that there is poor subscription into VICOBA for some of the community members due to their engagement in small scale fishing activities which lead them to relatively low income. VICOBA have benefited people in reducing their income poverty by playing an important role in enabling the poor to save and access credits.

5.2 Conclusions

Micro-finance can play a great role in reducing poverty and vulnerability of the poor. VICOBA lending model is a unique and an effective tool for development of rural communities. Like many other micro-finance institutions, VICOBA help people start and manage IGAs, and also they are capacitated to save, take loans and reimburse in time. Based on study findings it can be concluded that people in the study area have benefited from VICOBA by getting loans which have helped them reduce their income poverty. It is also concluded that attitude towards VICOBA activities in the study area was favorable. Based on t-test results it is also concluded that there is a significant difference in income earned per month between VICOBA and non-VICOBA members.

It is further concluded on basis of the regression analysis that other sources of income and number of children were significantly related to respondents‟ alleviation of income poverty. It is further concluded that challenges facing implementation of VICOBA scheme are twofold; first, is the poor performance of VICOBA related IGAs and second are factors affecting subscription of new VICOBA group members. In addition, markets are situated mostly in town therefore, there was the marketing problem with regards to products generated the situation affect performance of VICOBA members IGAs. Lastly, it is concluded that poor subscription into VICOBA groups is due to the fact that majority of Rufiji Delta residents are engaged in fulltime fishing activities and most of them have relatively low incomes. Generally, it is concluded that the VICOBA scheme has contributed significantly to income poverty alleviation of the community where it has been implemented.

5.3 Recommendations

Based on the study findings the following are the recommended;

i. VICOBA as an effective and relatively new rural development model in Tanzania requires a comprehensive advocacy strategy so as to subscribe more members especially from the rural communities where there are still some misconceptions connected to the scheme.

ii. 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. Some villagers were not ready to join VICOBA fearing that is one of the deceptive schemes, so effective sensitization needs to be provided to the community.

iii. There is a need for the VICOBA methodology or its mode of operation to be reviewed in order to integrate some paramount and contextual phenomenon that are area specific like coastal/marine, uplands, forestry, agricultural and pastoral rural communities.

iv. The potential of VICOBA is not only on credit but, also in other discipline like social aspect. These observations indicate that something needs to be done urgently to improve coverage and increase the number of Tanzanians to be served by VICOBA for their livelihood development.

5.5 Suggestions for further research

This study is too small to express general conclusions and only indications about the general picture can be drawn. As presented the VICOBA sector in Tanzania is still young and there are improvements needed for SACCOS and VICOBA to work effectively and lead to development and poverty reduction for members. Even globally there is a need for more, Comprehensive studies since there is still no consensus about the impacts of microfinance, not even within the well-studied areas about impact on poverty reduction and women Empowerment. Therefore more research within both these areas is needed, but I think there is also a need for more research about the impacts in a long-term perspective and to increase a more holistic view within the field of microfinance, in accordance with the growing field of environmental impacts of microfinance and green microfinance.

There is also a need for more and bigger studies in Tanzania focusing on several different areas, but maybe most important are impact assessments to see how well the VICOBA are working aswell as to identify obstacles and improvements that are needed for more effective Village community bank. More studies similar to the one using financial diaries, to see how poor people really use financial services, are also needed. Maybe the most important thing to study is not whether or not it leads to poverty reduction in general, but to actually study how poor people use financial services and how they should be designed to really be pro-poor and help people to improve their life situation.

Additionally more studies not only focusing on the microcredit or microloans are needed, like studying microfinance in a broader way as well as the importance and effects of savings and insurance. In Mtwara Mikindani it would be interesting to assess the SACCOS and VICOBAs again in a few years to see if there have been any progress and development since a lot of things are happening and VICOBA is still young. Additionally, how to improve the legal framework for

Microfinance as well as if there is a need to include VICOBAs and how this could be done is another area that could be subject for further research.

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