A skills training for current and prospective members of vicoba in Dunga, Zanzibar. Photo by Jessica Ott, used with permission.

Editor’s note: Jessica Ott studied women’s civil society organizing in Tanzania. This article is informed by research and fieldwork for her dissertation, “Women's rights in repetition: Nation-building, solidarity and Islam in Zanzibar.”

Vicoba, which stands for “village community banks,” are ubiquitous microfinance savings and loan institutions across Tanzania.

The majority of members are women who rely on vicoba to provide access to credit for business and other living expenses. Women widely describe these groups as a way to reduce their economic dependence on men and enable social solidarity.

Vicoba provide members with credit access during times of financial hardship, but they are not structured to support members during a societal level crisis — such as a drought or a pandemic — when everyone needs to borrow at the same time.

When Tanzania issued a stay-at-home order in March 2020 to prevent the spread of COVID-19 — essentially closing its economy for several months — most vicoba ceased to meet.

The World Bank issued a press release on June 8 that predicts a sharp slowdown of economic growth in 2020 due to COVID-19. Tourism operators forecasted revenue losses of 80 percent or more in 2020, and the crisis could push 500,000 more citizens below the poverty line.

Now, many women members are unable to contribute toward group savings or to pay back loans, which has raised concerns about how vicoba will cope with the long-term financial effects of the coronavirus.

As vicoba members struggle to pay back loans, a decline in group capital has limited the ability of members to borrow, according to a news report in The Citizen.

Women’s participation in vicoba has shifted gender norms and enabled women’s economic agency — to varying degrees — but as groups experience the financial strain of COVID-19, vicoba are in limbo.

An overview of vicoba

Vicoba have operated in Tanzania since the early 2000s. They were inspired in part by a Village Savings and Loan Association (VSLA) model that was first implemented by the Cooperative for Assistance and Relief Everywhere (CARE) in Niger in 1991.

Before vicoba, women participated in rotating credit associations and informal economic activities in Dar es Salaam at an unprecedented level in the late 1980s and early 90s, according to political scientist Aili Mari Tripp. At that time, Tanzania was transitioning from first President Julius Nyerere’s socialist project of Ujamaa (Swahili: “Familyhood”) and enacting structural reforms to liberalize its economy.

Established during a subsequent era of rapid global microfinance expansion, vicoba have been adapted to Tanzanian cultural contexts. They are usually self-initiated and self-sustaining, unlike borrower groups who acquire credit and accrue debt through formal microfinance banks. Women often establish vicoba with family members, neighbors, friends, and/or work colleagues.

In Zanzibar, the semi-autonomous archipelago off the coast of mainland Tanzania, where the majority are Muslim, many women give their savings groups names that allude to the socialist past or to Islam, like Umoja ni Maendeleo (Unity is Development) and Tunaomba Mungu (We Humbly Ask for God’s Support) groups — both on the island of Pemba.

Individual members buy into vicoba with shares, which enables them to take out loans to support their own business ventures or other living expenses, like health care costs or school fees.

Group members collaboratively determine the amount and terms of individual loans, such as the interest rate and length of repayment. When groups have excess funds, they instigate collaborative income-generating projects with earnings going back to the group.

Vicoba and unity

Vicoba help women meet their own financial needs, but they also enable and strengthen the notion of umoja or “unity,” which embodies ideas of community and mutual support.

A recent Twitter poll highlights the ubiquity of vicoba in Tanzania. Twitter user habimana playfully asked her 18,300 followers:

Mpira – unawaleta wanaume pamoja

Cartoon – zinawaleta watoto pamoja

Nini kinawaleta wanawake pamoja??

— habimana (@uwimano) June 3, 2020

If football brings men together, and cartoons bring children together, then what brings women together?

Over 850 people — mostly men — responded to the poll. The most common, somewhat disparaging response was umbea (“gossip”), closely followed by vicoba and hair salons.

Twitter user Abdulraheem cheekily tweeted:

Wazamani umbea, wasasa vikoba na vikundi vya ushirika

— Abdulraheem (@ibn_sayid) June 3, 2020

For women in the past, it was gossip, but for women today, it's vicoba and other savings groups.

Shifting ideas about gender and household finances

Twitter commentary about vicoba also sheds light on shifting gender norms and household economics in Tanzania.

Twitter user Myra complained to her more than 5,900 followers about the propensity of men to force their wives to wash laundry by hand rather than buying washing machines:

Sema watoto wa kiume mnapenda tu kuwatesa wake zenu na hizi issue za kufua. Washing machine hadi laki 5 zipo. Nasema mke coz kama hujaolewa ukajifanya we dobi utakuwa umeamua.

— ???? (@alwaysmyra) May 29, 2020

Hey, you young men just enjoy persecuting your wives with this issue of hand washing clothes. Even if you have the 500,000 [Tanzanian shillings or $250 United States dollars] for a washing machine. I say ‘wife’ because if you haven't gotten married yet and you do, you will have decided to become a laundry woman.

In response, Twitter user Mgwabi Mwambi challenged Myra for putting too much financial responsibility on men:

Hata watoto wa kike waliiolewa, wanapenda tu kujitesa kufua kwa mikono, washing machine hadi lako 5, wanaweza tu kujibana kwa pesa za VICOBA wakanunua na wala sio kusubiria mume anunue kila kitu.

— Mgwabi Mwambi (@JakaMgwabi) May 29, 2020

Even young women who are married, they enjoy persecuting themselves by hand washing clothes. If a washing machine is about 500,000 [$250 USD], which they can reach with their vicoba savings, then they can buy their own rather than waiting for their husbands to pay for everything.

The Twitter exchange highlights changing ideas and social norms related to the division of household labor and finances in Tanzania — and how vicoba play a role.

Microfinance during COVID-19

The situation in Tanzania points to the vulnerability of microfinance savings and loan groups worldwide when faced with large-scale crises.

During the Ebola outbreak in West Africa, restrictions on movement limited women’s economic activities, which drastically reduced the capital of savings and loan groups in Liberia and Guinea, according to a report by the United Nations Development Group.

Several humanitarian agencies have issued emergency measures and guidelines to mitigate the health and economic effects of the coronavirus on microfinance initiatives. CARE, with 357,000 VSLA groups in 51 countries, issued emergency guidelines for supporting savings and loan groups.

The future of vicoba in Tanzania

Some vicoba leaders on Tanzania’s mainland have considered emergency measures like extending loan repayment terms and reducing the interest rates on existing loans, according to The Citizen.

One possible emergency measure may be a government bailout. The Citizen reported that the Ministry of Finance and Planning was conducting a COVID-19 economic impact assessment and would provide recommendations for vicoba and other savings and loan groups. Its emphasis on recommendations, however, suggests that governmental financial assistance may not be forthcoming.

If women default on their loans, group members may decide to liquidate their assets to recoup group debts, which could potentially devastate vicoba and strain social relationships. Members may also decide to accept their COVID-19 related losses.

Vicoba — which provide community, mutual support and human connection — may help women mitigate the financial pangs of the coronavirus.