The role of microcredit institutions in poverty reduction and on dependence on natural resources A case study of COCOBA in Serengeti District By Emmanuel B. Sulle Dr. Robert H. Nelson, Advisor Frankfurt Zoological Society, Client October, 2012 Submitted in fulfillment of the requirements of PUAF 790 School of Public Policy, University of Maryland College Park
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The role of microcredit institutions in poverty reduction
and on dependence on natural resources
A case study of COCOBA in Serengeti District
By
Emmanuel B. Sulle
Dr. Robert H. Nelson, Advisor
Frankfurt Zoological Society, Client
October, 2012
Submitted in fulfillment of the requirements of PUAF 790
School of Public Policy, University of Maryland College Park
ii
Contents Abbreviations .......................................................................................................................................... iv
Executive Summary ............................................................................................................................... v
2.0 Scope and Methodology ................................................................................................................ 3
2.1 Research Objectives ................................................................................................................... 3
2.2 Study Site ....................................................................................................................................... 3
1 The details about the Mohammad Yunus definition and classification of microcredit can be found at : http://www.grameen-info.org/index.php?option=com_content&task=view&id=28&Itemid=108; accessed on 09/10/2012
As discussed above though these classifications of microcredit somehow exclude
COCOBA as its core goals are differs from most of these institutions. Yet, while
microcredit institutions (MFIs) have been in place for decades in Southern Asian
countries, they have been less popular in some parts of the world such as sub-
Saharan Africa (IAMFI 2012). It until 2005, when microcredit institutions got a new
degree of recognition after the United Nations dedicated 2005 “a Year of
Microcredit.” The UN launched the International Year of Microcredit 2005 to build
an inclusive financial sector to help achieve the Millennium Development Goals
(MDGs). It further aimed to strengthen the powerful, but often untapped,
entrepreneurial spirit present in communities around the Globe.2 2005 was
followed by the Nobel Peace Prize Award to Muhammad Yunus, the founder of
Grameen Bank-a highly recognized institution by NGOs and Multinational
organizations in 2006 (Herrod-Menzies 2008).
MFIs provide a range of options for the poor communities such as access to credit
and development of self-reliance. They do this at both individual and household
levels. Access to financial services leads to the increased income of the household
and subsequent increase in consumption, savings, investment and asset
accumulation (Zeller 1999; Banerjee 2010).
Proponents of microcredit institutions stress that they can play a key development
role compatible with “neo-liberal ideologies that champion individual initiative, self-
reliance, and ‘pulling yourself up by your bootstraps’” (Herrod-Menzies 2008).
Microfinance is also viewed as a win-win undertaking where lenders profit from the
interest they earn, while poor borrowers engage in “self-help” by using their
entrepreneurial skills and hard work to improve their lives (Herrod-Menzies 2008).
However, as explained earlier in this section, this system is yet inapplicable to MFIs
such as COCOBA which do not have lenders who are likely to expect profits returns
from earned interests.
2 http://www.un.org/events/microcredit/
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The Status of MFIs in Tanzania
While there are many MFIs in Asian countries, in Tanzania there are still very few,
and their penetration to rural poor communities is extremely low. In 2007, Tanzania
had only 16 MFIs and 249,000 borrowers. Most of these MFIs include small
enterprises such as Small Enterprise Development Agency (SEDA), Mbinga
Commercial Bank, and The Foundation for International Community Assistance
(FINCA).3 Some of these MFIs are further non-profit, tax-exempt charitable
organizations such as FINCA. Penetration of the MFIs to borrowers was respectively
1% and 2% of the general population and the poor. Tanzania has a population of 40
million people among whom the poor are about 14.4 m (Gonzalez 2008). In the
same year, Kenya had 28 MFIs with 975,000 borrowers while Uganda had 21 MFIs
with 121,000 borrowers.
A 2010 report by the Microfinance Information Exchange (MIX) shows that
Tanzania had only 13 reporting MFIs with a total loan portfolio of $63.7 million,
while in the same year Kenya had 27 MFIs and Uganda 25 MFIs, representing a total
loan portfolio of $1.2 billion and $256 million, respectively (Latortue & Linthorst
2010; KIVA 2012).
Compared with 2007, in Tanzania there were 3 MFIs that dropped out of reporting
to MIX. But the number of active borrowers and depositors also slightly declined. It
is unclear though if depositors declined were mainly due to the drop out of the 3
MFIs out or there are other factors. In 2010, there were 222,000 borrowers and
239,000 depositors, saving about $53 million (Latortue & Linthorst 2010). With the
national population growth, this number is low compared to Kenya where there are
over million active borrowers and over seven million depositors with total savings
of $1.5 billion a year. While these are important facts, they exclude small MFIs
3 For further details on the MFIs that report to MIX in Tanzania visit : http://www.mixmarket.org/mfi/country/Tanzania?gclid=COPUlpTEhbMCFYwc6wodF1QAhQ
While there are many factors that may explain why Rwamchanga Village had such
success, the enthusiasm of COCOBA TOTs may be a powerful factor as they play a
leading role in encouraging members’ participation in COCOBA activities. It was also
observed that two COCOBA teachers in Rwamchanga have done especially well
economically, but their success is likely due mostly to their experience, knowledge
and creativity. The other factor is the COCOBA leaders (Chairperson, Secretary and
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Treasurer). These are the people who lead the meetings and also participate in
different workshops and field trips. In general, an individual member creativity and
readiness to learn is fundamental to success. While the FZS and TANAPA try to
rotate participants in learning and exposure trips, the leaders are still the one with
the most exposure, creative and visionary leaders have effectively designed,
mobilized and engaged members in conservation and other income generating
activities such as beekeeping and poultry.
In addition, the village government plays a significant role in providing an enabling
environment for COCOBAs to flourish. A number of COCOBA activities are somehow
tied to village resources. For instance, in implementing beekeeping projects in
public land (s) COCOBA groups need to secure approval from both the Village
Council and Village Assembly. As of January, 2012, in Nyichoka and Bisarara villages
COCOBA groups have been allocated pieces of land for beekeeping and conservation
initiatives. By January, 2012, Zinduka group in Nyichoka Village had 22 beehives in
an area also protected as the water catchment area by the same group. Also,
Mkombozi group in Bisarara Village had 23 beehives installed in an area where the
group has also been planting trees for the past three years.
In these two villages, (Bisarara and Nyichoka) village governments’ view COCOBA as
one of the keys to conservation and development initiatives. During in-depth
interviews, village leaders explained that they give opportunities to teachers,
leaders and other members of COCOBA groups to mobilize their fellow villagers to
form new or join existing COCOBA groups in village meetings. This was also
observed during the group discussions with COCOBA members.
From the field observation, group discussions and interviews with key informants,
each village in the district has a set of leadership strengths and weaknesses. A
number of villages also have different attitudes on development issues. These
include poorly designed personal initiatives to start individual business or group
works. For example, in Zinduka group, Nyichoka Village, Respondent 2 (the TOT for
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Zinduka group) and her family have built a small hostel and curio shop in their
household compound. Presently, the hostel is used by tourists and visiting
international students. Although she started to work on her idea before the
establishment of COCOBA, the implementation of the project was the result of
training and loans she received from COCOBA. Respondent 2’s hostel is currently
registered as the Ikoma craft business center where all COCOBA and non- COCOBA
members in Nyichoka Village take their crafts which are later sold to the curio shops
in Serengeti National Park. Non-COCOBA members are charged extra service fees.9
Moreover, a total of 22 members of Zinduka COCOBA group have formed a dancing
group that performs regularly at the Grumeti Reserve Lodge for profit. The group
also performs traditional dance at various local functions such as wedding and
religious ceremonies in the village and Mugumu town.10
Therefore, COCOBA groups in different villages show different levels of
achievement. From this preliminary study, Park Nyigoti Village provides evidence of
how villagers can have low self-motivation to start up initiatives compared to the
other villages (see table 1 above). As of February, 2012, the Park Nyigoti Village has
had the lowest savings and loan rates than any other villages and has no group
projects compared to groups in Nyichoka and Bisarara villages which have
beekeeping and conservation projects. Also, as detailed above Zinduka group in
Nyichoka village have the most diversified economic activities. The Park Nyigoti
Village’s geographical location enables it to access markets for agricultural produce,
and customers for restaurants and shops. However, few or none of these initiatives
have been established in Park Nyigoti.
9 Personal communication with Zinduka TOT, June 1, 2012 10 Ibid
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4.3 Socio-economic activities The leading income generating activity11 practiced by the majority of COCOBA
members is agriculture (89%), followed by small business at about 10%. Agriculture
is usually practiced even by those who engage in other activities such as a business.
This can also be explained by the national statistics whereby in 2011, agriculture
remained the main economic activity for as much as 77.5 percent of the population
and it accounts for 95 percent of the food consumed in the country. In 2010
agriculture sector grew by 4.2 percent compared to 3.2 percent registered in 2009
(URT 2011). While at least every household has some livestock, only 7% of the
respondents mentioned it as a main part of their income generating activity.
Other income generating activities performed by the members of the COCOBA
groups vary from one individual to another and from one village to another. An
individual’s activity and production are influenced by the accessibility to loans,
individual skills and proximity to market places. A number of livelihood strategies
such as farming, livestock keeping and some small businesses have been in place
even before the introduction of COCOBAs. While this study identified these
traditional activities, it sought to know the types of income generating activities that
members of COCOBA groups were taking loans for in order to assess their progress.
The results show that COCOBA members are engaged in ten economic activities.
These include business such as restaurants, kiosks, buying and selling food crops,
salons, sewing and weaving, carpentry and selling livestock and crafts.
Apart from food crops cultivation, a number of COCOBA members participate in the
production of cash crops such as cotton and tobacco. Field observation revealed that
a number of COCOBA members participate in the tobacco business too. While some
may not understand some significant environmental problems associated with
tobacco farming, this is a serious threat to the sustainability of trees in the district.
11 The Danish Refugee Council defines income generating activity as 'small-scale projects that create an income source to individual beneficiaries or beneficiary groups whilst promoting a) the principal right to self-determination and b) the objectives of integration, repatriation and (re-)integration.’
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District agricultural officials, while concerned with the growing trend of tobacco
farming, have blamed politics because the crop was rejected to be planted in the
district for years due to its potential environmental impacts.12 The following studies
on COCOBA therefore should investigate whether the investments in tobacco
production and businesses among the members of the COCOBA continue in the
future. It is also important to note that this study has shown increase in a number of
economic activities carried out by the members of COCOBA groups. But, it has not
studied whether there were changes in economic activities such as production of
food crops and or cash crops between 2010 and 2012.
Presently, a tobacco Company called Tanzania Alliance has opened an office and
storage facility in Mugumu Township. While it is not the purpose of this report to
venture into the cultivation of tobacco in the district, it is noteworthy that
stakeholders concerned with conservation and development initiatives took the
matter seriously.
In recent years, charging mobile phones using solar power is one of the emerging
businesses among the members of the COCOBA groups. This is because most
villages that form COCOBA groups are not connected to the national grid. Other
common activities across the groups are selling food crops (grains such as maize,
beans, and sorghum), buying and selling livestock when prices are low and high
respectively. In recent years, there has also been increasing opening of kiosks and
restaurant businesses in the visited villages. These emerged as some of the reasons
people were taking loans from these groups.
4.4 Savings, credit facilities and household assets In an attempt to understand the availability of savings and loans, households’
representatives were asked whether they have savings, loans and sources of those
savings and loans. The results are indicated below.
12 Interview with the district agricultural officer, January 28, 2012
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4.4.1 Savings and types of collaterals In the survey, 82% of respondents had savings in COCOBA while 17% had no
savings, and for 1% the information was missing. To be a member of COCOBA group
one must have share (s) in it, therefore, the percentage of members with savings
could have been at least 99%. However, it is possible that this result might have
been due to lack of understanding among the respondents about their savings or the
way the question was presented. About 86% of the respondents reported having
secured loans from COCOBA between 2010 and 2011. The percentage is not 100%
because some members have returned the first loan, and they are yet or in the
process of taking the second loan. A majority of 74% have used their own shares to
access these loans. About 12% of the COCOBA members used livestock as collateral
to get their loans. The use of livestock is part of the agreement among the members
of JUHUDI group in Rwamchanga Village. It is only one person (1%) who used a
milling machine to secure COCOBA funds. In COCOBA, members form a small group
of five people with similar background (friends or acquaintances). Members of these
groups guarantee each other the loan taken from the larger group of thirty people.
Almost all those who used livestock as their collateral were from the Juhudi
COCOBA group in Rwamchanga Village. There was only one percent of savings in
commercial banks. This is partly explained by the lack of commercial banks in the
rural areas in Tanzania as in other parts of the country. Serengeti has had only one
commercial bank. It is only in the past year that the CRDB Bank Plc mobile bank was
introduced in the district; thus far only two commercial banks are operating in the
district.
Since the four COCOBA groups visited during this study were formed in 2010, they
only had one to two business cycles. Given this, most members only had one loan
from the COCOBA and few twice and very few thrice. According to the field results
those who took the first loans were about 86% of the whole members, while and the
second loans were 34% and less than 5% had taken the third loan.
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4.4.3 Households’ assets holdings At the time of this research, among the surveyed 73 COCOBA members 57 people
(78%) reported owning mobile phones. This equates to an increase of 4% between
2010 and 2012. Out of 73 members, 92% had one to four mosquito nets. This fell
short by 1% as compared to the 93% of those surveyed in 2010. While the statistical
significance of these increments are doubtful, the present ownership of mosquito
nets among the COCOBA members is slightly higher than the goal set by the
Population Service International (PSI) Tanzania; 80% of pregnant women and
children to be sleeping under insecticide treated nets by 2013, and for 90% of
households own at least one treated net (PSI 2012). The health benefits associated
with the use of mosquito nets include the increase in individual productivity and
saving of resources otherwise used to treat malaria.
When asked a follow up question on which assets members bought as the result of
the COCOBA business, their responses frequently showed purchase of solar for both
lighting and charging of mobile phones. For instance, in 2010, among the 89
households surveyed, only 2 households had solar, but in 2012, the number rose to
25 households. This increase can also be explained by the increase in the number of
people owning mobile phones (for more see table 2). Information about the
household assets is helpful in determining the wealth of the household and
investment and consumption patterns. At this point, however, it is worth
mentioning that these changes may not only be the result of COCOBA because there
is no data from non-COCOBA group (control group) this study has explored.
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Table 2: Changes in the households’ assets 2010-2012
Changes in the household's owned assets
Asset's name HH = 89 (2010) HH =73 (2012) Changes
% % %
Mobile phones 64 78 14
Mosquito nets 93 92 -1
Bicycles 63 71 8
Motorcycles 6 7 1
Maksai/Plough 61 66 5
Chicken coop 29 25 -4
Solar 2 25 23
Radio 63 58 -5
4.4.4 Impact of COCOBA on ownership of livestock In the survey, about 7% reported that livestock keeping was one of their main
economic activities. In the same survey it was also established that in 2011 alone
about 473 livestock were purchased by the members of the COCOBA groups. This is
about 4 livestock per household (this includes chickens). By 2012, on average,
members of the groups seem to have increased the average number of livestock
owned by a household by 3 livestock from 2010.
Table 3: Livestock owned by household from 2010 - 2012
Number of livestock owned by household in 2010 and 2012
2010 (88 HH) 2011 (73 HH) 2012 (73 HH)
Livestock Ave. per HH Purchased
Ave. per HH Livestock
Ave. per HH
Ave. changes in 2010 and 2012
3409 9 473 4 2752 12 3
Note: HH = Household; Ave = Average
4.4.5 The Impacts of COCOBA on households According to the results of the group discussions, COCOBA has been an excellent
means for members to get loans, business ideas, invest savings and make tangible
investments. During the group discussion in Bisarara Village, members of Mkombozi
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COCOBA groups expressed their feelings in different ways. One member of the
group noted that “if it was not for COCOBA, I could not have started my business of
selling goats’ soups in Nyamburi Village. I did not have business ideas, and the only
way I could earn any income was through selling bushmeat”. According to a number
of COCOBA members, COCOBA has not only brought about access credits and
trainings, but also created a forum in which members can discuss emerging issues
from social events to politics, development and conservation.
Today, all the four COCOBA groups have established social, environmental and grant
funds. These funds cater to educational and health issues, and environmental
protection. Grant funds are set for special donations and gifts. Although COCOBA is
in the early stage, members of the groups have expressed their confidence in these
initiatives. To-date these funds have helped a number of families with financial
difficulties to pay tuition fees for their children at the Secondary School.
Education: FZS in collaboration with SENAPA has taken a number of the COCOBA
members to a number of business exhibitions in Arusha and Mwanza cities. Having
these exposures, today members of the COCOBA groups have greater business skills
and experience than before joining the groups. This was observed during group
meetings where people expressed how they could not keep earnings they generate
from their businesses before joining COCOBA. But, after COCOBA’s trainings and
exposure trips, they do cost-benefit analysis and budget their earnings better on a
priority basis.
Entrepreneurial Skills: From the survey, 56% of the total respondents mentioned
that one of the benefits of COCOBA was the development of entrepreneurial skills. In
the discussion groups a majority similarly expressed that they benefited from the
training offered by COCOBA TOTs. A number of participants mentioned that
training did help them to prepare and write business plans. At the same time, the
members expressed the need to have more guidance to further improve their
business skills, financial management and search for markets.
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Social changes: Through exposure to public forums, women in COCOBA groups
gain public speaking and decision making skills. During the group meeting in
Nyichoka Village, one participant expressed that COCOBA has strengthened
women’s participation in decision making processes in both household and public
spheres. While this can also be explained by increasing changes in society at large
due to the growth of access to media (mobile phones, radios and other sources of
news), COCOBA provides an opportunity for members of both sexes to practice
accountable and transparent leadership.
Group activities: To-date, a number of COCOBA groups have established activities
where every member participates. Other groups have members participate in
group activities individually. From the surveys, the leading group activity is
environmental education in which 60% of the members participate. About 53% of
the members engage in craft making. 6% of the members participate in group
beekeeping projects and about 32% participate in goat keeping projects in their
groups. The group participation in beekeeping projects is low because in Zinduka
group – Nyichoka Village, individual member purchases and installs their own
beehives, but they are all within the group’s land.
Figure 3: COCOBAs’ group activities
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4.4.4 Household’s source of cooking energy The majority of COCOBA members (88%) depend on firewood as the main source of
energy. Charcoal is the second source of energy and is used by (11%), and kerosene
by 1%. None of the members uses electricity or gas for cooking among the 72
households who responded to this survey. On average, a household uses 2 bundles
of firewood per week and those who use charcoal spend 1.6 bags each week.
Figure 4: Source of cooking energy
4.6 Peoples’ attitudes, perceptions and views towards COCOBA To understand peoples’ perceptions of COCOBA a number of questions were asked.
The results show that people consider COCOBA has had a beneficial environmental
impact in their area. In the survey, 85% said COCOBA has increased the number of
planted trees in their areas, and 79% and 58% think COCOBA has reduced
incidences of illegal poaching and bush fire, respectively. Also, 36% of the
respondents mentioned that COCOBA has stopped habitat destruction, and 47%
consider COCOBA has brought back some of the previously declining/missing
wildlife species. Nevertheless, these responses were obtained from closed-ended
questions. Therefore, some responses might have been affected by the perception of
social desirability. These findings are by no means minor. Similar responses have
also been provided during the group discussions. For instance, the issue of wildlife
increase is of high concern among members of COCOBA groups because incidences
of large mammals like elephants and zebras eating and destroying farm yields are
37
on the rise. Villagers’ perception that poaching has declined is however contested
by the district game officer. According to the game officer, the number of poachers
caught might have declined due to the increased use of technology such as mobile
phones that may enable poachers to escape game rangers.13
However, as we can see in figure 5 below, there is no significant decline in the use of
natural resources particularly firewood and charcoal by local communities. Since
88% of the COCOBA members still depend on firewood as their source energy, the
11% of those who said COCOBA has reduced dependence on natural resources may
reinforce the former. In addition, the lack of reliable, cheap and clean alternative
sources of energy makes it difficult for COCOBA members to shift away from the
traditional sources of energy. At the moment, all villages where COCOBA has been
initiated are yet to have electricity or gas services. Kerosene which is used by the
single household among COCOBA members is currently an expensive option. By
April, 2012, a liter of kerosene was sold at TZS 1700 ($1.09).
Figure 5: COCOBA’s perceived impacts on environmental conservation
13 Interview with the District Game Officer, January 28, 2012
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4.6.1 Other environmental benefits of COCOBA. In the survey, other benefits of COCOBA groups mentioned by the respondents
include increased income (78%), provision of alternative sources of income (42%).
59% of the respondents think that COCOBA has improved their livelihoods. COCOBA
also has been mentioned as the key poverty reduction strategy in both group
discussions and in-depth interviews. This correlates to the survey results where
74% members of the four COCOBAs mentioned poverty reduction as one of the
benefits of COCOBA.
Figure 6: Other benefits of COCOBA
Also, in the group discussions, it was established that, even though COCOBA has
been in place for only three years, a number of COCOBA groups have made some
significant achievements in conservation efforts. For instance, in the four villages
visited during the field work, groups have either established or are in the process of
acquiring some space for conservation and development initiatives. A Zinduka
COCOBA group in Nyichoka Village has established a protected water catchment
area. Presently, the group uses the same area for its beekeeping project. Also, at the
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time of this writing the Zinduka group had 22 beehives14 installed and with bees.
The Mkombozi group in Bisarara Village has set up a beekeeping project and has 23
beehives already installed in the area.
As the management of natural resources evolves, these communal initiatives are
critical. They are likely to lead to sustainable conservation strategies in high value
ecological areas. Empirical evidence indicates that regions with effective community
management of forest resources have little or no deforestation. These communities
have also been recognized for having sustainable livelihoods (Bray 2010). The
initiative to protect water catchment areas in Nyichoka village has an informal
background. The value of water in areas with livestock is understood. This is similar
to the informal protection to guard water sources and wildlife refuge practiced in
Mexico (Bray 2010), thus, contributing to COCOBA’s success in renewing traditional
conservation strategies.
4.7 Household expenditure patterns This section analyzes the expenditure patterns of the household. It shows
household allocations of earned profit on consumption, savings and investment. It
also shows how people spend most of their profits.
4.7.1 Use of earned profit The usage of the earned profit from business activities varies from one household to
another. Among the COCOBA members, about half (55%) of the income earned from
COCOBA businesses is spent on school fees and other things necessary for a child to
attend school, mostly secondary. However, in the absence of comparison with non-
COCOBA members, therefore, it is difficult to know how much other people in rural
areas spend for their children’s education. In Tanzania, the secondary school has
annual fees of about TZS 40,000 ($25.70). The cost of school fees, however, varies
from place to place, particularly when additional charges such as desks and
14 Field visit in both Nyichoka and Bisarara villages, January 25 &28, 2012 and Tumaini Njema. 2011
40
uniforms are included. Another source of spending is on household nutrition (37%).
This might be the result of the households’ demands for manufactured and
processed food products. A number of people re-invest most of their profits in their
groups as shares. According to the survey, 34% of profit is re-invested. Some use
their profits to buy household assets, and/or start building permanent houses. Some
spend profits on health services.
Figure 7: the usage of earned profit from COCOBA businesses
Comparing groups’ performance
To-date each COCOBA group has achieved a changing level of performance Park
Nyigoti Village has few people who have shown progress in terms of resource
acquisition, taking loans as well as buying household assets. From the survey
results, this village has few people engaged in community projects compared to the
other three villages.
There is a need to address the competence of the group leaders and trainees.
Facilitating agencies (FZS and SENAPA) should ensure that the COCOBA leaders and
trainees are themselves enthusiastic about what they are doing, and there should be
41
election period and performance measures. This might include the level of
individual performance in the group as well as a commitment to do his/her
responsibilities.
Left unchecked, weak groups may not make any progress and/or may disintegrate
altogether. Presently, the COCOBA group in Park Nyigoti Village has few individual
projects and has yet to start any group project. Compared to the rest of the villages
where groups have started or already established group projects, Thorani COCOBA
group is also yet to make tangible progress.
The Future of COCOBA
The results from group discussions, in-depth interviews with key informants, and
household surveys show that members of the general public are willing to join
COCOBA groups as means to improve their lives. Government officials support these
groups. A number of them consider COCOBA a basic development unit15. In the
survey, 92% of participants agree that members of their villages are willing to join
COCOBA. While these results are encouraging for conservation organizations
thinking of establishing more groups, there is a need to study the views of non-
COCOBA members about the current COCOBA groups. Any rush to establish more
groups may mean less guidance to the current groups before they actually take off.16
Nevertheless, once sustained the current groups will be an example and model for
new establishment.
Another important aspect that might determine the future of the COCOBA groups is
the repayment of loans. As of today, this has not been an issue. Each group has a set
of rules that originate with the group’s constitution. But, it is worth paying attention
to how groups evolve as they strive to grow and attract more shares from members.
15 Interview with the Serengeti District Executive Director, January 2012 16 Interview with the Serengeti National Park, Outreach Program Officer, January 2012
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5. 0 Discussion
As elaborated in sections above, this study has sought to shed light on the progress
of four COCOBA groups in Serengeti District. There are indeed a number of
promising achievements, but COCOBA is still faced with a number of challenges. This
section discusses those challenges, and provides insights on from the literature and
experiences.
Presently, most people in COCOBA groups are engaged in small activities such as
selling grains, poultry, livestock and charging mobile phones using solar power.
While in the short-run some or all of these undertakings are viable investments,
there is still needs to develop more projects that are sustainable and with long-term
benefits such as beekeeping and retail shops. These are projects that can be
sustained over a long period of time. For instance, during the group discussions
members of the COCOBA groups have expressed their interest in soap making
businesses, but they lack the skills to do so. In Tanzania, locally produced soaps
have been in use for many years. Women groups in Mto wa Mbu, Monduli District
have been producing soaps using locally grown jatropha seeds (Sulle & Nelson
2009). In Bukoba District, the local orphans’ center, the ‘Solidarity With Orphans’
produce soaps to be used by children.17 The center produces liquid and hard soap
soldto the local communities and businesses such as hotels,
hospitals and local transport companies. Indeed, the soap making business has been
reported as successful among the members of MFIs in India. Brook et al. (2008)
observe that a group of 31 women who set up a soap powder-making business, at
one point sold over 250 kilograms per month. This activity has potential short-term
and long-run benefits to COCOBA groups and is thus worth facilitation by all
stakeholders engaged in development and conservation.
17 More about the production and use of locally produced soaps check: http://solidarity-orphans.org/tanzania/projects/soap-projec/
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As of now, it is clear that a number of investments made by COCOBA members have
direct and indirect benefits to both conservation and poverty reduction efforts. For
instance, more than half (55%) of the total revenue earned by the household is used
to send children to school. This does not have an immediate effect on poverty
reduction and dependence on natural resources. Rather, the attempt to send
children to school will have potential benefits on poverty reduction and
conservation efforts in the longer run. At least, highly educated people tend to
secure well-paid jobs reducing the levels of poverty in the society (Tilak 2005).
However, while the field results indicate higher allocation of earned profit to
children’s education, it is unclear if non-COCOBA members also do the same or not.
People with increased wealth have both positive and negative impacts on the
environment. For instance, some may respond to wealthy by leaving villages and
stay in urban areas engaging in businesses. Also, in some cases, people with
increased wealth reduce their dependence on natural resources through
diversification of economic activities and consumption. However, as a result of
increased wealth some people tend to expand their consumption of natural
resources as they have the capacity to do so. Therefore, income diversification is
not a total cure for present environmental problems. Also, sending children to
school might have also been encouraged by other factors such as the government
policy of establishing more primary and secondary schools at the grassroots level
and therefore, may not necessarily be the direct effect of COCOBA initiatives. From
2005 to 2012 there has been an increasing trend in students’ enrollments in
secondary schools around the country. For instance, in 2010, the enrollment of
students increased from 1,566,685 to 1,802,810 in 2012. This is equivalent to 15%
increase in two years (URT 2012). Also, perception that sending children to school
as proper use of income pleases development partners might have influenced a
number of responses to this study. Therefore, systematic analysis on the use of
earned profit from COCOBA need to be evaluated in next short and long term
studies.
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At the moment, another noteworthy observation is that the COCOBA groups in
Serengeti are not linked to any of the microcredit institution or commercial banks.
COCOBA operates according to the set of rules and a constitution prepared by the
local people in collaboration with their facilitators and donors. While this gives
COCOBA greater independence from external influence, it reduces its financial
capabilities and potential exposure to modern financial management. Nevertheless,
this approach shields it from national and global financial problems such as an
overpayment of managers in a number of countries in South Asia (Di Bella 2011).
However, without precautionary measures, as this initiative expands, it will require
an experienced management team which will demand reasonable pay.
Also, as observed in other studies, the use of a household’s assets as collateral is one
of the reasons that some poor household can become worse off if they fail to repay
loans. However, at the moment, this is not a problem for COCOBA groups, as none of
them is using land as collateral to secure loans, rather their own shares and the
small group’s guarantee. But, for efficient and sustainable COCOBAs, increased
capital, and hence higher credit to members, is crucial. At that point the use of
physical forms of collateral such as land and house might be used. It would then be
crucial to address the issue of common and individual rights. However, since the
COCOBA is at its preliminary stage, yet its main goal has always been to leave it
grow using its members shares, the challenges of using household’s assets may be
avoided.
Further development of COCOBA might need to consider collaboration with village
leaders at the grassroots level. This is because in the rural areas village leaders are
trusted by their followers who extend beyond the COCOBA members. Therefore,
COCOBA initiatives need to engage these leaders strategically. This will enhance
activities of the COCOBA groups such as environmental education, traditional
businesses as well as conservation related initiatives. As pointed out earlier, it is the
village government and village assembly that have to approve development and
conservation initiatives that may require village lands. Indeed, the findings from the
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field interview indicate that there are a number of COCOBA members who are also
part of the village government. However, any political domination by village leaders
needs to be avoided
Gender and poverty are key features that any stakeholder engaged in an initiative
like COCOBA might not want to underestimate. Presently, the COCOBA targets are
mainly men, previously identified as bushmeat hunters. Yet, as the institutions
expand, it is likely to attract more women. A number of previous studies have
indicated women form a larger population of MFIs. The Microcredit Summit Council
of Practitioners reports that women in rural communities are the poorest and the
most responsible for household compared with men (Grown et al 2005). This poses
a challenge to these women to benefit from their efforts in a society where most of
the household decisions are made by men. However, during group discussions
participants explained that decisions are jointly made at the household level. But, it
is at least understood that many traditional aspects favor men as the head of the
households in many African tribes and thus most decision at the family level is done
by men. Since women carry out at least 60% of the domestic responsibilities, they
deserve to have a voice in household decision making. Left unaddressed, this will
affect women’s participation in COCOBA activities when men continue to hold
powers on resource spending.
As observed in the findings, a majority of the COCOBA members use their loans and
profits to send their children to school. While this is a tangible long term investment
assuming that children succeed in their education, it has less of an immediate
environmental impact. It also poses a risk on loan repayment. This is, therefore, one
of the aspects that donors and environmental stakeholders engaged with COCOBA
initiatives need to watch. However, this study had no participants outside COCOBA
members, thus unable to compare the rate of children’s enrolled between COCOBA
and non-COCOBA members.
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As detailed in the section above, the purchase of mobile phones, bicycles and
mosquito nets among the COCOBA members has increased in the past two years.
While one explanation for the increase in the purchase of mosquito nets might be
the increase in household income, it is also possible that this has been influenced by
the government’s campaigns to reduce malaria endemic in the country. But, in any
case this has a potential impact on the productivity of members in both the short
term and long term as it possibly reduces their spending in medical services. The
demand for bicycles among the COCOBA members increases as they engage in small
trades and therefore transport goods and services in search for markets as well as
collecting raw materials. In 2010, there were about 63 household that reported
owning bicycles and in 2012 the number increased to 71 households with bicycles.
This is an increment of 8% of household members that purchased bicycles.
5.1 Challenges While the initial findings indicate some positive progress among the COCOBA
members and groups at large, a number of challenges persist. These include:
Inadequate entrepreneurial skill and technical knowhow
In all four group discussions, COCOBA members have expressed their appreciation
about the trainings they have received on entrepreneurship. But, they have also
indicated the need to have more guidance to equip them with more business skills
and financial management. Members want to get skills on how to make marketable
goods such as crafts, soaps and candles. Materials for these goods can be produced
locally, and it is likely that market for soaps and candles will be available in both
rural and urban areas. Crafts for instance are sold to curio shops in Serengeti
National Park and Ngorongoro Conservation Area. Lack of basic education among
the COCOBA members makes it difficult to work faster and effectively in terms of
recording and reporting. The majority of the respondents (67.12%) have only
primary school education and only 9.59% have the secondary school education
while 4.11% have no formal education. This speaks volumes in terms of the need for
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training to equip members of the COCOBA groups to understand basic business and
entrepreneurship skills. Only one person in all four groups had a college Diploma
while two with vocational training education. In rural Tanzania, this is a generic
problem, but, the possession of basic skills is crucial for individual or group’s
success in business.
Available empirical studies indicate a higher correlation between the levels of
education and poverty among the rural communities. Studies carried out in India
show that people with post-elementary education have better chances to improve
their livelihoods than those with only elementary education (See Edwards 2002;
Tilak 2004).
Market availability
While the term markets might trigger minds as a common problem, it is much more
complicated at the grassroots level. Markets for local produce are volatile and highly
affected by government policies. The availability of sustainable markets will create
incentives for local communities to produce goods and services to meet demand.
But lack of markets for the rural and urban communities in Tanzania and Africa at
large is a common phenomenon. In April, 2012 the daily newspaper ‘The Citizen’
published an Op-Ed written by Jimmy Smith the director general of the International
Livestock Research Institute with the title “African farm produce wasted for lack of
reliable markets”. Smith points out that lack of markets in Africa is critical and
suggests that the issue should be treated as equally important as poverty reduction
and economic growth. One way this can be done is to ensure small holders have
access to financing and to market information, to crop storage and transport.
Effective policies also need to eliminate bureaucratic delays and price volatility,
providing incentives to local producers (Smith 2012). This is one of the timely
revelations of the small producers’ situation on the ground in developing countries,
and it is an eye opening message to conservation and development practitioners.
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While the conservation NGOs and TANAPA may not have direct responsibility for
arranging markets for the produce of COCOBA members, the two organizations have
a key role to play in enhancing their members’ access to market.
TANAPA has an obligation to mobilize conservation stakeholders including hotel
owners in Serengeti to buy goods and service produced by the local communities
surrounding the park. Also, through the private-public partnership, FZS may well
fund sustainable business initiatives in the area.
Also, as indicated above most of these groups are located in the rural areas and they
do not have organized transportation systems. Roads are also seasonal, making
business difficult during the rainy season, and before they are paved. Improved road
network will not only improve the business environment, but also reduce the time
and number of avoided health risks due to long distances for getting health services.
The challenges identified by common people in the visited groups are not new. As
pointed out in the literature, Wild et al (2008) observed that microfinance is
unlikely to bring about tangible benefits in the absence of supportive interventions
such as institution building capacity, environmental education, common property