Impact of village community Banks (VICOBA) loans in improving smallholder Farmers’ income in Kiteto District in Tanzania
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Date
2017-09-28
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St John's University of Tanzania
Abstract
The major objective of this study was to investigate the impact of VICOBA Loans in improving smallholder farmers’ income in Kiteto District, Manyara Region. Specifically the study intended to examine (i) community’s perception towards VICOBA loan services, (ii) The extent that VICOBA has contributed to the access of micro loans among smallholder households, (iii) Contribution of VICOBA in smallholders’ households’ income among VICOBA members, and (iv) Challenges facing smallholder farmers on access of micro loans from VICOBA.
The study involved 100 smallholder farmers who had accessed VICOBA loans. It employed a cross sectional survey design with a mixed research approach. Data were collected from smallholder farmers using a questionnaire and from KIs using an interviews guide. Secondary data were solicited from document analysis. Data were coded, entered in SPSS version 21 for analysis, cleaned, and results were presented in tables, figures and graphs.
The study revealed that smallholder farmers were also involved in different economic activities such as food crops, garments and restaurants. Moreover, cross tabulation of individual and characteristics against smallholder farmers’ perception toward VICOBA have show weak significant difference between individual characteristics and their perception. These differences lies on their age, experience in business, household size, business size, marital status, paid employment and education level. In addition to that, the study found that VICOBA were efficient in provision of loan services. Also the study show that, there was no enough knowledge from members of VICOBA on how to perform well in farming due to saving and access of soft loans which improves their production and increase their income.
However, the study concludes that, although loan provided by VICOBA had no influence on smallholder farmers’ income, But it has improved their livelihood and helps them out of extreme poverty. The study recommended that the Government need to incorporate VICOBA development model into the National Poverty Reduction Strategy and also review cooperative and microfinance policies.