“Two days before Christmas in the low-income neighbourhood of Mabvuku in Harare, Zimbabwe, a group of women marched down a pothole-ridden street towards the house of their savings club’s treasurer. They were meant to share out the money they had been saving for six months for Christmas shopping, but the treasurer was nowhere to be found. Informal savings clubs, known locally as mukando, have become popular in Zimbabwe, especially among women and those in the informal economy. These clubs allow members to save money together and borrow from the pot with interest. However, the lack of regulation and reliance on trust can leave members vulnerable to being swindled.
Carol Madzimo, a 24-year-old hairdresser, was one of the women searching for the treasurer that day. She had joined the club with her mother to save money for Christmas groceries. Despite the treasurer disappearing with the members’ savings and interest money, Madzimo was able to recover her contributions. However, Tanaka Mutyori, a 26-year-old business owner, was not as fortunate. After joining a savings club, she never received her share of the savings and interest, causing her business to suffer.
Zimbabwean economist Prosper Chitambara explained that savings clubs are popular among women and people in the informal sector due to the access to investment capital they provide. These clubs offer a way for individuals to save money, lend to each other, and invest in businesses. While savings clubs have benefits, such as protecting members’ funds from requests for money from others, they also come with risks of mismanagement and fraud.”