The role of informal microfinance institutions in saving

Village Banks
Village savings and credit banks are true banks used by villagers to make their savings safe and
productive by granting loans to individuals or groups who belonging to them.
The villagers jointly establish the operating rules of their bank by appointing one or several
managers, while a credit committee reviews and decides how to grant loans, provides
monitoring and the assisted collection of the manager. On the principle, the village bank
mobilizes local savings ton recycle it into the village economy.
Savings and Credit Cooperative Societies
Savings and credit cooperatives societies, for their part, channel their members’ savings,
essentially classifying needs to grant loans oriented toward social needs, handcrafts and small
business. The members are the sole beneficiaries, sole savers and sole decision-makers.
Their association or proximity with other production- or consumer-based cooperatives makes
them integrated and effective tools for rural development.
1.1.12: HISTORY PERSPERCTIVE OF SACCOs IN TANZANIA
Although studies by Jack Dublin and Selma Dublin in 1978 show that Savings and Credit
Societies were initially introduced by missionaries working with the Nyegezi Social Training
Centre in 1960, current evidence shows that the first SACCOs in Tanzania was established in
Moshi Town by the Ismailia Group in 1938. From there, the Catholic Church picked the idea
when the Late Cardinal Laurean Rugambwa (then a Bishop) visited Michigan Credit Unions in
the late 1950’s to learn more about SACCOs. Other people to be exposed to Credit Unions
were Father Amanita, Father Mutashaba and Mr. Mutayoba. These were trained first in the
USA and then in Canada in 1962. Mr. Mutayoba later on became the first president of the
Savings and Credit Cooperatives Unions League of Tanganyika (SCCULT) and also the first
President of ACCOSCA (Dublin, J. et al, 1983). From this humble beginning SACCOs moved
from being organized and promoted by religious organizations to become secular
organizations.
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