The hidden dangers of Zimbabwe’s informal savings clubs

Community savings schemes provide support for many Zimbabweans but also put vulnerable people at risk of being swindled.

Harare, Zimbabwe – It was two days before Christmas in the low-income neighbourhood of Mabvuku in Zimbabwe’s capital Harare. Music played, people chatted and most were in a festive mood.

But not the small group of women marching down a narrow, pothole-ridden street on their way to the house of their savings club’s treasurer. They had a much more serious matter in mind.

The previous day, the women were meant to share out money they had been saving together for the last six months to use for Christmas shopping. But when they called the mobile number of their club’s treasurer, they got an automated response: “The number you have dialled is not available.” They tried his number multiple times, but to no avail.

Informal savings clubs have gained popularity in Zimbabwe in recent years, especially among women and people in the informal economy who may not trust banks or have access to traditional savings and loan options, experts say.

Known locally as mukando, meaning contribution, these clubs usually have about a dozen members who come together to save money.