Saving to Death: A Study of Group Based and Other Saving Arrangements in Rural Chivi District, Zimbabwe

Publication Date: 2000
Published by: FAO - Food and Agriculture Organization
Document Type: Case Study

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How and why do the rural poor save?

This paper presents a study that is part of a wider research project funded by Food and Agricultural Organization (FAO). It discusses the issue of rural savings using the village, Mazoredze, in the Chivi district of Zimbabwe, as the research area.

The study seeks to provide evidence that there are financial systems available in the villages, which if strengthened, would help improve rural welfare. According to it, the research throws light on:

• Local conditions – Political, social, economic and physical that give rise to savings;
• Existing financial institutions and the effectiveness of their services vis-à-vis needs of poor households;
• Informal saving strategies:
  • Keeping cash in secret places or with friends and relatives,
  • Saving in groups,
  • ‘Giving’ and ‘receiving’ cash or goods,
  • Investing in assets such as cattle, food and labor.

Further, the paper discusses reasons for savings:

• To invest in resources for future use;
• To improve living standards, for instance, through education;
• To build regenerative resources to meet unexpected crises; and
• Due to the lack of appropriate financial support from government and non-governmental organizations.

The paper concludes that policy makers need to:

• Be aware of informal financial systems and strategies;
• Design appropriate support mechanisms.