Saving groups are sharing out

Picture: Sharing out of Ebeneza group in Orkejuloongishu. They accumulated 3,200,000 Tsh during their first cycle and generated a profit of around 20% (The price of a share was 500 Tsh and they received 603 Tsh per share during the share-out meeting).

Trias and its local partners PWC, Mwedo and Mviwata Arusha have been training around 30 community trainers in 2016 in the VICOBA (Village Community Banks) methodology. Those trainers have trained 140 VICOBAs up to now (+- 3300 members, 80% female members).

A VICOBA is a saving and credit group of people who save together and take small loans from those savings. The group activities run in cycles of around one year, after which the accumulated savings and the loan profits are shared out back to members according to the amount of savings of a member. The annual share-out resolves any outstanding issues and builds member confidence. It provides an instant verification to all members that their money has been safe and that the process is profitable. A healthy return on savings is between 5 and 25% per year.

Since the first VICOBA trainings within Maisha Bora programme started last January, groups are now starting to share out. Some groups organize a big event with a celebration and a fundraiser. After the share-out, members who do not wish to continue may leave the group and new members may be invited to join. Our advice to the groups is that members who plan to continue to the next cycle will agree to use some of the shared out savings to make a contribution to the loan fund for the next cycle (starting capital). This means the groups do not start with an empty credit box in the next cycle and can give bigger loans faster.

When a new cycle begins, members will conduct new elections for the committee, review their constitution and may make changes to the amount of social fund contributions, price of a share, interest rate etc. We look forward to follow-up on our groups in the next cycles!