Esther Mwedzi sits on the front veranda of her home in eastern Zimbabwe separating her laundry. The large, modern brick house stands out against the dusty yard. “I built this house with my hardwork,” the 38-year-old mother of three told TriplePundit.
Mwedzi belongs to Mutekwatekwa, a savings group in Chitiyo village near the capital of Zimbabwe’s Manicaland province, Mutare. With no access to banks, she borrowed low-interest loans from the informal savings group to buy materials like bricks, cement, windows and doors. A year and a half later, she had built a four-bedroom home for her family.
Informal savings groups — popularly known as “mukando” in Shona, a local language — offer small loans to their members at a 10 percent interest rate. And unlike commercial banks and other registered financial institutions, they do not ask for collateral. Thousands of these groups exist across Zimbabwe.
Interest rates for commercial banks, on the other hand, are as high as 46 percent annually. Lending from them also requires payslips, letters of employment, and proof of residence, which are significant barriers in a country with a high unemployment rate where many people work in the informal sector.
Zimbabwe’s financial sector, and especially access to capital, is inaccessible for many, said Rashweat Mukundu, a social commentator. Formal banking is limited to the few who hold formal jobs and businesses, so savings groups are a long-standing method community members can use to support each other.
“The poor, urban, and rural communities mobilize whatever they have to support investment and to support food security,” he told 3p.
Lending to your neighbors
Informal savings groups allow people to pool money regularly to access low-interest loans and earn returns based on trust and agreed rules.
Established in January 2024, the Mutekwatekwa savings group that Mwedzi belongs to serves 50 members. They are divided into four, 12-person groups, and each group manages its own funds. Every member contributes at least US$5 monthly to the shared pool.
Each small group lends money to its own members, expecting them to repay it within a month with an additional 10 percent in interest. The 12 members share the extra income from the interest at the end of the year.
The initiative helps people access capital, acquire assets and start up small businesses, said Jeremiah Chitiyo, chair of the Mutekwatekwa savings group. “At the end of the year, members’ savings normally double,” he added. “Small loans have enabled people in this community to build houses, buy cows and goats, pay school fees and drill boreholes.”
The clubs encourage people to work hard so that they can contribute something to the group at the end of the month, Jeremiah said. Most of the members make their money from farming and keeping livestock, but the Mutekwatekwa savings group also runs a garden, where members grow vegetables and fruits to eat and sell to pay for their monthly contributions.
Some members also run their own informal savings group outside of Mutekwatekwa. Senior Chitiyo, a relative to Jeremiah and another Mutekwatekwa savings group member, is in a separate six-member club made up of smallholder farmers. The area is dry and water is scarce, so the members are taking turns loaning out the group savings to each other to drill boreholes to irrigate their crops.
Each borehole costs about $2,000, which is beyond the reach of what Senior can afford on her own. Using lessons from Mutekwatekwa savings club, she pays $25 a month towards the borehole drilling initiative. So far, the group has drilled boreholes at three members’ homes, and Senior is next in line. Construction is scheduled for August 2027.
Senior is not new to informal savings groups. She has participated in different clubs for more than a decade, using the proceeds to build her house and feed and clothe her four children.
The broader impact
Village savings groups were the first step to improving community members’ livelihoods, alongside climate-smart agriculture and ability to sell produce in more towns, said Delilah Takawira, country director at the international humanitarian aid and development organization CARE Zimbabwe.
CARE Zimbabwe built the Mutekwatekwa garden and helped establish its savings groups with funding from a United States Agency for International Development (USAID) program designed to reduce poverty and improve food security and climate resilience. “Our role is facilitator, not financier,” Takawira said. “We train groups, support them to develop their own constitutions, and step back. Members own and manage their money.”
USAID funding cuts imposed by U.S. President Donald Trump in early 2025 disrupted the effort, which was supposed to run from 2020 to 2027. But because long-term sustainability was designed into the program from day one by encouraging local ownership and self-managed structures, like the village savings groups, much of what it built continues to live in the communities without additional support.
“Savings groups do not require external funding to operate,” Takawira said. “They belong to their members.”
Tsitsi Mahari, another member of the Mutekwatekwa group in Chitiyo village, built her family a three-bedroom house with loans from her group. It’s a modern home with tiled floors, sectional couches, and a smart television powered by a solar system.
“I bought building materials for this house and the furniture,” said the 23-year-old mother of two. To do so, she borrowed loans as high as $300, which is more than what most Zimbabwean government workers like nurses and teachers earn a month.
CARE Zimbabwe established similar programs across many communities. As of 2025, its programs have supported 47,777 village savings members in 5,013 groups around the country. Combined, they have saved over $1.1 million and circulated nearly $2 million in loans among themselves.
Beyond the numbers, the real impact is seen in people’s lives. Across rural communities, women who once relied solely on seasonal farming are using savings group loans to start small businesses — like chicken farms, tailoring shops and grocery stores — creating new and more reliable sources of income.
Many members have also improved their financial literacy skills, learning how to budget, save, invest, and manage household finances more effectively, Takawira said.
Savings groups also help households build resilience during difficult times, Takawira said. “During recurring droughts and economic shocks, many families have been able to draw on their savings or access loans to purchase food and pay school fees,” she added.
What if someone defaults?
The benefits of informal savings groups come with a fair share of risk. Some people take advantage of the absence of legally binding agreements and guarantors. Across the country, many borrowers have failed to pay back the loans, resulting in financial losses for the savings group. Others may intentionally target the groups to steal money.
“This is a system entirely based on trust and promoting the common good,” social commentator Mukundu said.
The Mutekwatekwa group in Chitiyo village has experience with members who refused to pay back loans, Jeremiah said. To safeguard members’ money as much as possible, the savings group avoids giving loans to non-members, as it is difficult to follow up when they default. Members also develop, agree to, and sign a constitution that clearly states the program is owned by its members, only open to its members, and does not accept money from external parties.
“All transactions happen in front of the full membership,” Takawira said. “The funds sit in a lockbox with three keys, held by three members.” Groups that lend within themselves experience less theft cases compared to those that lend to non-group members across the country.
Right now, the loans in Chitiyo village are small and can only help boost small businesses, but access to any funding is better than nothing, Mwedzi said. She plans to borrow from her group to start a chicken farming project and tap into the larger market in the province’s capital, Mutare.
“Now that I am done building, I want to invest in a broiler project” she said, smiling. “I want to diversify my sources of income.”
