Mt Kilimanjaro, TZ – Family earns first-round micro-loan from Village Community Banking group – 18 Mar 2016

The Lishe Bora VICOBA group has awarded its first round of small business loans to members. The POK family was one of five families to receive a loan of 50,000 TZS (US $25.00) in the group’s first round of lending. They are investing the money in farm inputs for the 2016 early growing season.

30 families in Lishe Bora’s organic gardening program came together in October 2015 to start a Village Community Banking program, called a VICOBA locally. Every week the families meet together and each member makes a 2,000 TZS (US $1.00) lending account deposit and a 500 TZS (US $0.25) savings account deposit. Money from the lending account is lent to group members with 10% interest for income projects. Money from the savings account is lent at 0% interest when a group member must pay unforeseen medical or educational expenses.

VICOBA Members form small groups of five or six people. Loans are given to an individual member but are guaranteed by the small group. Within the small group, members negotiate collateral. The POK family owns two pigs which they plan to sell in April. If they had to wait until April to get capital they would miss the planting season and half a year’s harvest. The 50,000 TZS loan will enable them to plant on time and if they fail to make repayments they have offered up one of their pigs as collateral.

50,000 TZS will help the family rent an acre of land and pay people to help them quickly cultivate and plant on it. They saved seeds from last season for planting and will use manure from their pigs. They will depend on higher powers for rain, but if all goes well they could harvest up to 800 kg of corn from their plot, which could be sold for 480,000 TZS (US $240).