Communities share lessons learned on microfinance

VICOBA in action in Kikole village

MCDI has introduced a microfinance scheme into some of the villages where it works. As well as supporting local livelihoods development MCDI hopes that the training included will help raise financial literacy in the communities, which will be critical for the effective management of forest revenue.

The model MCDI is using is called the Village Community Bank (VICOBA), which is based upon successful community savings and loan schemes developed by Care International in Niger, West Africa, and adapted for the Tanzanian context. The model is used widely in Tanzania where it is viewed as the entry level microfinance scheme suitable for poor and rural communities.

MCDI introduced VICOBA to two selected pilot villages, Kikole and Kisangi, beginning in October 2010. To share the successes achieved and challenges encountered over the last year MCDI initiated its first VICOBA Group Forum, which was held in Kisangi on 17 September 2011. Community members, local stakeholders and MCDI staff were all in attendance to listen to speeches prepared by participants in the VICOBA schemes from Kikole and Kisangi. They heard that as a result of the VICOBA scheme so far 12 villagers have been able to pay for health services whilst 3 participants have been able to pay for secondary school fees. Another key benefit of the VICOBA scheme is that it has created a sense of togetherness and cooperation amongst its members.

MCDI is encouraged by these initial successes and will be rolling out VICOBA to at least two more villages, whilst continuing to monitor results and cost-effectiveness.