Case Study

Village Savings and Loan Associations: Experiences from Zanzibar

This study examines the performance of village credit associations which no longer receive support
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This study sets out to investigate the performance, sustainability and usefulness of the financial services offered by the Village Savings and Loan Associations (VSLA) in the livelihoods of their users, especially in cases where they do not receive back-up after the initial training.The paper details the following aspects:

  • Basic characteristics of VSLA users;
  • The role of CARE and other support organizations;
  • VSLA performance after the external support is withdrawn;
  • Usefulness of services and changes in the lives of users.

The paper cites the example of Jozani Savings and Credit Associations (JOSACA) program in Zanzibar, Tanzania. The objective of the study was:

  • To examine the performance of (VSLA) groups in Zanzibar after several years of operations independent of CARE or other non-governmental organizations (NGOs);
  • To understand the outreach of the program to poorer members of the community, and its ability to provide useful services and produce change in the lives of users.

Finally, the paper lists the following findings:

  • Good performance by the VSLAs in Zanzibar, in terms of growth and sustainability;
  • Effective demand for the services from the communities and good potential for expansion into other villages in Zanzibar;
  • Poverty outreach and the socio-economic profile of VSLA users in the socio-economic context of Zanzibar and Tanzania, as well as the availability and use of other financial services indicating that VLSA is operating well;
  • Replies by respondents:
    • An improved standard of living - 22%;
    • Improved housing - 21%;
    • Increased incomes - 20%.
  • Women respondents citing the ability to save and improved savings habits as a positive result.

About this Publication

By Anyango, E., Esipisu, E., Opoku, L., Johnson, S., Malkamaki, M. & Musoke, C.