Case Study

Savings Mobilisation to Microfinance: A Historical Perspective on the Zimbabwe Savings Development Movement

Why did the Self-Help Development Foundation shift from savings mobilization to microcredit?
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This paper aims to understand the historical development of the savings movement in Zimbabwe and highlights the factors that prompted the Self-Help Development Foundation (SHDF) to implement its own microcredit scheme after decades of savings mobilization.

The paper traces the origins and development of the SHDF:

  • The beginning of the savings development movement;
  • The post-independence period;
  • The structural adjustment program, donors and microfinance.

It analyzes the impact of the introduction of micro-credit:

  • On SHDF:
    • Clarification of vision and mission;
    • Integration of savings and credit into one microfinance institution (MFI) entity.
  • On savings clubs:
    • No impact on savings;
    • Diversion of loan funds purposes other than the original purpose;
    • Decrease in informal lending.

The paper concludes that:

  • Prior to the emergence of the savings movement, colonized Africans had already developed certain forms of savings organizations;
  • Savings development movement was developed from the early 1960s as an attempt to harness community self-help activities;
  • Introduction of credit has forced SHDF to clarify its vision and mission, separating its "financial" and "educational" objectives;
  • The program apparently increases differentiation between savers and borrowers, and also between "good" borrowers and "bad" borrowers;
  • The program divides the clubs on the basis of savers and borrowers, old and new members, successful and unsuccessful entrepreneurs.

About this Publication

By Raftopoulos, B., Lacoste, J.
Published