A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN RURAL DEVELOPMENT OF SOKOINE UNIVERSITY OF AGRICULTURE. MOROGORO, TANZANIA.Microfinance has shown to be an effective tool for combating poverty and improving the wellbeing of the poor. Village Savings and Loan Associations (VSLAs) area community managed micro finance thathas been reported to attain outreach and impact to rural people better than formal, centralized microfinance institutions.However, the VSLA sector in Tanzania is rapidly changing in terms of its operations; these changes are introducing both innovations and new risks that are affectingtheir sustainability.Drawing on 200respondents from 21 VSLAs, 4 focus groups and 7 key informants, this research sought to analyse changes that have happened on the operation of VSLA and their implications for sustainability of these associations in Same District.A cross-sectional study was conducted inFebruary 2016. The findings indicated that allthe surveyed VSLAs (21) had undergone various operational changes. It was also found that 30.9% of the respondents reported the need toincrease financial capacity of the VSLAs, which was among the major factors that influenced the decision on VSLA operational changes. Using ordinal logistic regression, it was found that type of VSLA change (p ≤ 0.05), transparency (p ≤ 0.05), satisfaction with growth of loan fund (p ≤ 0.05), following VSLA constitution (p ≤ 0.05), training on loan and share mobilization (p ≤ 0.05) had positive and significant impacts on chances of VSLAs being grouped into highly sustainable. Also, it was found that a great proportion of the respondents (38.1%) reported that inadequate capital was a major challenge facing VSLAs in the study area. In conclusion, types of VSLA change, transparency, satisfaction with growth of loan fund, following VSLA constitution and training on share and loan mobilization have positive impact on VSL sustainability. It is, therefore, recommendedto stakeholders to consider these factors to enhance VSLA sustainability.