IMPACT OF BORROWING LITERACY ON THE ECONOMIC EMPOWERMENT OF VSLA MEMBERS IN SELECTED GROUPS IN KILOMBERO DISTRICT, TANZANIA.

Author

Oliva Ferdnand Mgongolwa, Theobald Kipilimba, Haji Ng’elenge


Abstract

 This study assessed the impact of borrowing literacy on the economic empowerment of Village Savings and Loan Association (VSLA) members in selected groups in Kilombero District, Tanzania. A mixed research approach using a descriptive cross-sectional design was adopted. Quantitative data were collected from 226 VSLA members using structured questionnaires administered through KoboToolbox, while qualitative data were collected from four VSLA facilitators through Key Informant Interviews. Quantitative data were analysed using Statistical Package for the Social Sciences (SPSS) version 27 through descriptive statistics, Pearson correlation and multiple regression analysis, while qualitative data were analysed thematically. The findings showed that borrowing literacy had a positive and significant relationship with economic empowerment among VSLA members. Members with better borrowing knowledge demonstrated better understanding of loan conditions, responsible borrowing, repayment obligations and productive use of borrowed funds. The findings further showed that borrowing literacy contributed to improved income management, business activities and the ability of members to use borrowed funds productively. The study concludes that borrowing literacy contributes to the economic empowerment of VSLA members in selected groups in Kilombero District. The study recommends that VSLA facilitators and organisations supporting VSLA programmes should strengthen practical borrowing literacy training, with emphasis on loan assessment, responsible borrowing, repayment planning and productive utilisation of borrowed funds.


Keywords

Debt literacy, Credit literacy, Women economic empowerment, Livelihood improvement, VSLA groups, Community savings groups, illage banking, Community-led finance



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