Effects of Village Savings and Loan Associations on Households’ Livelihood in Ilala District, Tanzania.

Msangya, Zacharia Mgendi (2023) Effects of Village Savings and Loan Associations on Households’ Livelihood in Ilala District, Tanzania. Masters thesis, The Open University of Tanzania.

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Abstract

Village Savings and Loan Associations (VSLAs) are community based financial institutions that allow easy access to loan to individuals who had no such opportunity because of a number of unmet requirements from the financial institutions. The specific objectives of this study are three; to assess the effects of VSLAs on households‟ livelihood, identify challenges facing VSLAs and to propose measures to address VSLAs‟ challenges in Ilala District in Tanzania. The social identity theory guided this study because it informs that not every member of VSLAs could attain improved livelihood unless they take the required initiatives. The study adopted descriptive research design involving both qualitative and quantitative approaches. The study revealed that, VSLAs have positive effects on households‟ savings, income, and access to loan. Despite the advantages of VSLAs, VSLAs encounter number of challenges such as dropouts, untimely disbursement of loans, defaults and delayed loan repayment. Some of the proposed measures to address VSLAs‟ challenges include eliminating non-committed members, enforcing compliance and capacity building of VSLAs members. The study concludes by highlighting areas for further studies particularly, the comparative analysis of the effects of VSLAs vis-à-vis other forms of savings on the livelihood of households. Eventually, the study recommends the recognition and inclusion of VSLAs in the microfinance Act, effective monitoring, digitalization of the operation processes of VSLAs and male involvement in VSLAs. Keywords: Defaults, Household, Loans, Village Savings And Loan Associations, Livelihood.

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