Savings Mobilisation to Micro-finance: A Historical Perspective on the Zimbabwe Savings Development Movement

Publication Date: 2001
Published by: FAO - Food and Agriculture Organization
Document Type: Paper

View this Document   Email this Document

Why did Self- Help Development Foundation shift from savings mobilization to microcredit?

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:

• 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.