THE ROLE OF FINANCIAL LITERACY ON CLIENTS’ PARTICIPATION IN VILLAGE COMMUNITY BANKS (VICOBA) ACTIVITIES IN KARAGWE DISTRICT, TANZANIA

Abstract

This study examined the role of financial literacy on clients’ participation in VICOBA’s activities in the Karagwe district, Tanzania. Particularly, the study assessed how financial literacy affected the clients’ loan borrowing, loan repayment and savings and deposits. This study used descriptive and explanatory survey designs and the data were collected using a structured questionnaire administered to 12 VICOBA groups and 205 clients located in the six villages. The random sampling and survey techniques were applied during the data collection. The data analysis was done using SPSS version 23. Data were analysed using descriptive statistics and multivariate analysis. The findings of the study indicate that financial literacy positively and significantly influenced VICOBA clients in borrowing, loan repayment and increase of the clients’ shares and deposits. This study recommends that VICOBA members should be regularly be trained on various financial concepts to promote their financial wellbeing.

Keywords: Financial literacy, Client’s Participation, Village Community Banks (VICOBA)