KNOWN as clubs or rounds, or ukuqogelela in IsiNdebele and mkando in Nambya and Nyanja, or even stokvel, informal saving schemes have become a means to an end for many with members benefiting from financial literacy training.
A stokvel is a members-only club where members form a saving scheme by contributing to a central fund on a weekly, fortnightly or monthly basis.
Stokvels are popular in South Africa where the name originated from the term “stock fairs” as the rotating cattle auctions of English settlers in the Eastern Cape were known in the early 19th Century.
In Zimbabwe, several informal saving schemes exist and some have seen members taking home between US$1 000 and US$10 000 after sharing the savings at the end of the year.
In Victoria Falls there are numerous stokvels and people have used saved funds to build houses, buy cars, start and boost businesses and take care of their family needs.
The clubs have become a sustainable source of livelihood and taught people financial literacy, a virtue that can be learnt regardless of social status or occupation.
Some of the clubs that have become very popular are Big Mothers, Arise and Shine and the Zimbabwe Chamber of Informal Economy (ZICIEA).
Big Mothers was established a decade ago by 10 local Victoria Falls.
Arise and Shine is one of the 12 clubs started under the Serving Internal Lending in Communities (SILC) by Lubhancho House, a Catholic Church-run organisation in partnership with various organisations that seek to uplift the livelihoods of vulnerable members of the society, including addressing child marriages, encouraging education, child protection, empowerment, safe reproductive health and hygiene and others.
SILC programme was established this year with total membership from 630 urban and rural households and more than 1 000 individuals in Chidobe, Chisuma, Dibutibu, Masuwe, Monde, Ntabayengwe, Sizinda and Victoria Falls.
ZICIEA is a national association with 45 territories countrywide.
Earnings from the clubs have become start-up capital for projects and the clubs now have male members.
Elsewhere, self-help clubs and burial society members drag each other to the Civil Court especially around the end of the year for theft of trust property after they dupe each other. Savings clubs have security mechanisms to protect savings.
Members contribute either stipulated amounts per given period or any amount they can afford.
The savings are lent to members or non-members. They also contribute to buying groceries and kitchenware which they share at the end of the year.
Some have also started burial society schemes.
The effects of Covid-19 are still being felt as some of the club members struggled to save this year.
Big Mothers secretary Gugulethu Ndlovu said they had reduced membership from 130 to 75 and raised monthly contributions from between US$10 and US$30 per week per member to between US$30 and US$200 per week.
She said the club has transformed livelihoods but added that there is a need for vigorous awareness among members to understand how informal savings work.
“We have cut on membership and increase savings so that each member saves at least US$10 000 at the end of the year for those on the US$200 per week group. We have three categories and people now have seen that the club is helpful but need to appreciate how it works,” said Ndlovu.
“We started this with a business mind and to help each other. Our biggest challenge is lack of understanding of savings clubs and we educate each other on financial literacy once every month,” she said.
Big Mothers members apply for loans from the group which they repay within 30 days at zero interest.
Simangaliphi Ngwenya-Ncube, an executive member of Arise and Shine said people’s lives have been transformed thanks to stokvels.
Members are drawn from Victoria Falls and Masuwe.
“We seek to help and empower each other as members. Our members are elderly and youth and people have bought household property, livestock and built houses.
“We do internal and external lending and also contribute towards buying household property which has brought decency in people’s homes,” she said.
She said members sit and share their savings at the end of each year. New members are taken through rigorous financial literacy coaching by senior members.
ZICIEA Victoria Falls territory president Virginia Chisanga membership is free to anyone whether formally or informally employed.
The club started in 2015 and the Victoria Falls territory has 180 members comprising men and women, and to become a club member one needs to affiliate with ZICIEA.
“Our members include the elderly, youth and people with disabilities. Those who are employed can become members but can’t hold positions as the idea is to empower the vulnerable. We pool together savings or buy groceries that we share at the end of the year.
“We have also started a burial society facility where members contribute money every month as we try and help each other in times of bereavement,” said Chisanga.
She said members also benefit from various training programmes. The club plans to expand in 2023 after suffering setbacks as a result of Covid-19 which saw some members failing to contribute consistently. – The Chronicle
