Abstract

In the past three decades the microfinance has been tremendously developed in rural and urban areas, but most of microfinance institutions are not delivering sustainable microfinance services. This study is centred on determining factors influencing sustainability of Village Community Bank (VICOBA). This study used case study research design. Six VICOBA groups were involved in Newala district and data collection was undertaken using questionnaire, key informant interview and documentary reviews. A total of seventy two VICOBA members were involved in the study. The study found that members of VICOBA need essential microfinance services. The findings show that VICOBA is member based institution where its members are responsible to ensure its sustainability. There are different actors who are involved in operations of VICOBA including the government, donors particularly Lindi and Mtwara Agribusness Support (LIMAS) in the study area. The study has found that sustainability of VICOBA groups is determined by four key factors which are members’ income generating activities, shares and loans provided by the group, leadership and accountability and members’ education. The study recommends that members should be accountable in their VICOBA groups and dependence from donors support should be at minimal and self-sustenance should be the motive.