The Efficacy of VICOBA Intervention in Alleviating Poverty in Emerging Economies: A Study of the ORGUT SEDIT VICOBA Lending Scheme Project in Morogoro, Tanzania

Abstract

Microfinance institutions have emerged as crucial agents in the fight against poverty, particularly in emerging economies. Despite debates about their effectiveness, microfinance interventions have contributed positively to socio-economic conditions, improving livelihood access. Recognising the importance of the microfinance subsector, Tanzania has instituted tools to foster financial inclusion. The Village Community Banks (VICOBA) are an example of these efforts, aiming to empower marginalised communities through financial inclusion and access to credit. This study assesses the effectiveness of the VICOBA intervention in alleviating poverty in Morogoro District, Tanzania. Using a cross-sectional design and logistic regression analysis, the study examines the relationship between key variables (access to credit, ability to save, access to insurance services, entrepreneurship skills) and poverty alleviation. The results show the effectiveness of access to credit, savings, and access to insurance services in poverty alleviation.