ASSESSMENT OF THE VILLAGE COMMUNITY BANKS (VICOBA) LOAN TO HOUSEHOLD’S ECONOMIC PERFORMANCE IN TANZANIA

Abstract

The current government phase of the United Republic of Tanzania strives to transform the country`s economic theme from agrarian to industrial economy, financial inclusion is an important factor towards the roadmap of arriving into industrial economy. Financial experts suggest an alternative of saving mobilization for villagers by establishing Village Community Banks (VICOBA). Street tailors are among of loan beneficiaries from VICOBA and their contribution in national economy is significant. Observing the contribution of VICOBA loan to households economy, this study aimed to assess the VICOB) loan to household’s economic performance in Tanzania, specific objectives were To examine factors for loan accessibility for street tailors from VICOBA in Arusha City Council, To examine economic effect of loan from VICOBA to street tailors in Arusha City Council, To examine how the loans from VICOBA improve the street tailors households‟ economy in Arusha City Council .in this study, applied theories were the bucket theory of financial management, lending theory and entrepreneurship theory. Relevant empirical reviews with ten (10) years interval were discussed. Enumeration area was Arusha City Council, the study employed cross-sectional research design and sample of 200 respondents were selected and questioned through questionnaire. Findings of the study unfolds that, loan from VICOBA is significant in improving the life of street tailors. The study recommended that, there is a need for the key stakeholders to ensure that VICOBA are surrounded with good financing environment.