Vicoba or vikoba
Whether you spell it with a 'k' or a 'c' both word refer to the same thing. The first word in Swahili means a small purse carried by women. The second in English is short for Village Community Bank. The small 'purse' here referred to is the metal box containing the money contributed by the shareholders of Masaki village in Kisarawe District. Actually there are two such groups in this village. After the first group - mostly consisting of elderly people - was established as a pilot project in 2003,- younger people saw what possibilities there were for borrowing money, and they wanted to become a vikoba group themselves.
When the first vikoba bank started out it had a capital of 1.600.00 Tshs. This money was raised equally by the 25 members of the vikoba group and though a loan by World Conference on Religion and Peace, WCRP, a cross sectional religious organisation, whose fundraiser is Gideon Mandara. It is he who invited me to attend a vikoba bank meeting.
But first the group had to attend a 12 week course in banking, trading and in how to set up a vikoba group. During the 3 weekly lessons every member contributed 1000 Tshs. The group continued to meet every week until it had collected 800.000 Tshs. A loan - now paid back - was given by WCRP and the group was ready to lend money to its shareholders. The vikoba bank charges 10 % interest, which is normal bank interest in Tanzania. One day the vikoba group may have to negotiate a loan through the established banking system and then it is a good thing that you are used to how much you have to pay for a loan.
This actually happened not long ago when 4 vikoba groups jointly negotiated a loan of 30.000.000 Tshs through the CRDB bank.
The 12-week course is a learning by doing process in that the vikoba group writes its own constitution, taking the WCRP template as a guideline for their own vikoba rules. They discuss whether a loan should run for 3 or 6 months, what interest is to be paid, what kind of documentation should be provided by the borrower before taking out a loan. (e.g. a budget with specifications of investment or purchase of goods, and the profit you expect to make.)
How does the vikoba banking system differ from a 'normal' micro finance bank? The most important difference is that only members of the group can borrow money from the bank, and that the money in the bank comes from the members themselves. They are the bank and they reap the surplus on the money lent to members. Apart from not having to pay normal bank rates, the advantage for the members is the 'nearness' of the bank. It is there in the village itself, represented by the vikoba, the metal box where the money is kept.
One might think that keeping the money in this way, would be the weak link in a vikoba arrangement, but in order to eliminate any temptation of theft there are 3 key-holders, each with his or her own lock and key. So the vikoba cannot be opened unless all key holders are present at the same time. The box is pretty heavy, and only a member of the group would know where the box is kept between meetings. - So if you should get away with stealing it, the chances of being found out would be pretty high. To disguise the box it is kept in a sack, ordinarily used for storing maize.
Another aspect of this 'nearness' is the weekly group meeting where outstanding problems are discussed and loans provided. Also on this day the bank is opened for the members' weekly contributions (hisa or share) of 1000 Tshs. There is another plastic bowl with 'elimu' and 'afya' written on it. This is yet another aspect of vikoba; it is a social welfare fund from which money can be given as a loan without interest to members in need, to cover the expenses for school materials or medicine. The last of three bowls is for faini (fines). Such fines have to be paid for being late with your monthly payment 1000 Tshs. (If you do not have the money you are well advised to borrow from a friend.) If you misbehave or fail to attend a meeting without reporting it to the chairman or secretary, you also incur a fine (of 200 Tshs). Or if you are late - as we were - a voluntary fine was paid (by me.) At the end of the meeting the secretary would read out the figures for this week's banking transactions: Shares 24.000 Tshs. This means that 24 out of 25 members had paid. 54.000 Tshs. loan repayments, 10.000 Tshs for 'elimu' and 'afya'.
There was an interesting episode after the meeting: Gideon Mandara and I went to talk to the village chairman, an energetic and open minded person who pointed to an interesting 'side effect' of the vikoba concept. Since his wife has joined the vikoba group he felt that they shared the burden of caring for their children more equally than had been the case before. Now she had her own income, and has acquired new knowledge. Actually there are more women members in this vikoba group than men. I asked him if this did not pose a problem for some men. Would they not feel their position threatened by this Women Empowerment. He dismisses this by saying that there are many men who think the way he does.
Women Empowerment is a translation of the term as it was coined 12 years back in Niger where the first vikoba groups were set up among women. From here the idea has been taken over by many organizations in various countries (among them also Care Tanzania with 100 groups.)
Esben Røjel.
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