MONEY-SAVING clubs, popularly known as “round tables” in Zimbabwe, have turned out to be a life-changing experience for some people. Report by Ropafadzo Mapimhidze

Members contribute fixed sums of money to a central fund on either a weekly, fortnightly or monthly basis, enabling members to purchase goods and services for cash.

Some have actually bought cars like what hair stylists at a hair salon along Herbert Chitepo in Harare have been doing over the past few years. Some of these women now drive some of the trendiest cars in town.

One woman at the salon now owns a Mercedes Benz, a dream that she never thought would come true.

This is a concept that is historical and also very common in rural Zimbabwe.

“I have been involved in these saving clubs for over five years now and I am happy to let you know that I now own a car, a plot and various furniture and electrical gadgets like a washing machine, stove, two fridges and many other small items.

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“We started off by buying groceries for each other on a monthly basis where we put at least $50 each in a pool of 10 members. We bought groceries like rice, powdered milk, tea, coffee, cooking oil and many other goodies in bulk that we shared between us.

“But now we are contributing $200 per person every month between 15 people and this has resulted in some of our members buying cars, something that could not have happened before.

“It is difficult to get a loan from the bank and this concept has enabled us to borrow funds from this pool of money and repay at a small interest,” a hairstylist Rudo said.

“We disburse the funds towards the end of the year at a big party where we celebrate our success.”

Some women are known to raise $1 000 each per month for such savings and these have actually deposited for land to build their own homes.

“People have a low opinion of hairstylists, but we now own fancy movable and immovable assets which many people with all sorts of qualifications don’t have.

“I will continue saving this way until I die. I also now have a retirement plan with some insurance company and I am confident that I will live comfortably when I am too old to work,” said a woman who sells various wares at Avondale flea market.

A widow in Glenview 8 said she had managed to send her daughter to study at a university in South Africa using proceeds from a money-saving club with 10 women. “The beauty of these savings is that you can borrow money and pay back with a small interest.

“Any person recommended by the members can also borrow and pay back for example in four months,” she said.

Last year, NewsDay reported that one in every three Zimbabweans did not save money despite growing confidence in the financial services sector after the adoption of multiple currencies. A national survey has also shown the same trend.

According to FinScope Consumer Survey Zimbabwe 2011, a nationally representative study of demand for usage of, and access to financial services in the country, 31% of adults in Zimbabwe do not have a savings culture.

The survey showed that the majority of people in the rural areas continue to save money outside the formal banking system due to limited banking products being offered.

The Ministry of Finance commissioned-survey included 3 984 interviews in the nationally representative sample.

Those who save are most likely to save at home, read part of the survey.

People mainly save to be able to pay for living expenses during hard times, as well as for education or school fees and emergencies.

The survey also revealed that the rising cost of living has been one of the reasons why most Zimbabweans are either borrowing or saving.

At least 27% of adults who save money, the study showed, save their money at home compared with 11% who use the formal banking system. The survey also showed that about 12% of people who save their earnings do so through savings clubs.

In general, adults in urban areas are more likely to use financial services and products. But the use of credit products is more common in rural areas, which possibly also relates to the large proportion of people using informal products or services to borrow money (15% only rely on informal products), reads the survey.

Financial exclusion, the report states, remains high in the rural areas possibly due to limited accessibility to banks and formal salaried employment opportunities.

Most of the savings clubs comprise between 10 to 20 women who take turns to give each other a set sum of money.

Each member must ensure that she pays her contributions on time.

The cash is either disbursed monthly or at the end of the year.

A big party is hosted by these members where invited guests buy food and drinks.

Cash realised from this party kickstarts yet another year.