Kilimanjaro, TZ – VICOBA savings and loan group continues to help families move towards income self-reliance – 26 May 2017

More than a year after members of the Mkyashi VICOBA began lending to each other they are continuing to collaborate to improve their lives and generate value in their community.  After their first full year of operation, members opted to leave their invested capital in the bank and withdraw the interest they had earned offering loans to each other. On average, each member got a 7% return on their invested capital. Members also opted to withdraw all of their savings because the one-year anniversary of the bank coincided with the planting season, which requires investments of seed and fertilizer. This combination of savings and interest provided much needed extra capital for the group of small-share farmers.

The group reported their financial position 3 months after their one-year anniversary:

# Member Families: 27
Total TZS Invested in Shares: 2,530,000 TZS (US $1,177)
# Loans Given: 43
Value of Loans Given: 4,350,000 TZS (US $2,023)
Minimum Loan Amount: 50,000 TZS (US $23)
Maximum Loan Amount: 300,000 TZS (US $140)
# Loans in Default: 1
Value of Loans in Default: 50,000 TZS (US $23)
Year 1 ROI for Members: 7%

In addition to money that is invested as “shares” and lent to other members, members also put money into a “Family Emergency Fund.” This money is offered to other members interest-free to cover family emergencies like medical bills and late school fees. Bank members withdraw their money from the Family Emergency Fund at the end of the year and start their saving process over again. Since withdrawing their Year 1 savings, bank members have saved 110,500 TZS (US $51) in the fund.

For the rest of this year the group is looking forward to continuing to increase the size of loans they are able to offer each other. As a next growth step, they are interested in finding other ways they can work together to increase their income.