Member Participation in Tanzanian Savings and Credit Co-operative Societies

Abstract

Microcredit is now in fashion, peaking in 2005 which was the UN Year of Microcredit. However since starting in Europe, co-operatives have been offering savings and credit services for more than a hundred and fifty years. Native Tanzanians welcomed their first agriculturalists' co-operative as long ago as 1925. Tanzanian Savings and Credit Co-operative Societies (SACCOS) have been active since independence and by 2005 there was a total of more than 1,620 SACCOS but only 62 NGOs active in microfinance. In theory, co-operatives offer more benefits to the poor than microcredit schemes. The major purpose of this study is to critically examine the extent to which SACCOS in Tanzania are indeed following co-operative principles based on self-help, mutuality and common bonds and thus providing a pathway for participative development for the poorest members of Tanzanian society. The context of relationships between the co-operative movement and the government is also a focus, since, without a knowledge of this chequered history, it is impossible to understand the development trajectory and current roles of SACCOS in Tanzania. The methodological approach of the study involves a critical in-depth analysis of the workings of three selected SACCOS with a particular focus on how they were established, the nature of member participation and empowerment and relationships with government entities. These three case studies are built up employing a qualitative research approach to generate understanding of the dynamics of SACCOS roles in providing services and personal opportunities to individual members. Data was collected both through in-depth interviews and documentary evidence. Data analysis included a critical examination of tensions, contradictions, divergencies and ambivalence in the data since perceptions of the process of co-operative development often varied depending upon the status of the observer.