The Contribution of VSLAs and AMCOS to Income Poverty Reduction in Tanzania: A Case of Her Money, Her Life Project

Abstract

This study examines the contributions of Village Savings and Loan Associations (VSLAs) and Agricultural Marketing Cooperative Societies (AMCOS) to income poverty reduction in rural Tanzania, with household income as a proxy for economic empowerment. Using cross-sectional data from 271 VSLA and AMCOS members across four districts, multiple linear regression was applied to analyze programmatic and socio-demographic factors influencing income. The findings indicates that, participation in VSLAs and AMCOS led to a significant increase in average monthly income that rose from TZS^[1] 141,380 before participation to TZS 233,550 after participation, marking a 65% increase (p=0.001). The findings demonstrate a significant positive impact of AMCOS participation on income (B = 23,210.33, p = 0.000), highlighting their critical role in enhancing market access and collective bargaining power. Conversely, collective investment participation was negatively associated with income (B = -54,200.53, p = 0.039), pointing to inefficiencies such as mismanagement and inequitable benefit-sharing. VSLA participation showed a near-significant negative coefficient (B = -14,173.86, p = 0.083), indicating their primary focus on financial resilience rather than income growth. Socio-demographic factors, including age, gender, and education, were not significant predictors of income, emphasizing the influence of structural interventions over individual characteristics. To maximize poverty reduction, development partners should strengthen AMCOS governance, transparency, and member capacity through targeted training and coaching. VSLA promoters should link VSLAs to AMCOS and provide entrepreneurship and financial management capacity building to enhance income-generating potential. Policymakers should incentivize cooperative membership, improve rural infrastructure, and enforce regulations for collective investments. These measures can contribute to addressing structural barriers, improve financial outcomes, and foster sustainable poverty reduction in rural Tanzania.

Key Words: Household Income, Agricultural Marketing and Cooperative Society (AMCOS), Village Saving and Loan Association (VSLAs), Agri-fund, Collective Investment

DOI: 10.7176/JPID/64-06

Publication date: July 31^st 2025

[1] USD 1 = TZS 2,652.45 in November 2024