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Microfinance: Saving Money, Changing Lives

By Kim Pozniak

Dressed in an orange shirt and a brimmed hat, Tendai Mahbena leads a procession of 26 women through her village of Malalume in southwestern Zimbabwe. The women, all in bright uniforms, are singing and dancing. They quickly draw the attention of villagers watching from a row of nearby shops. The colorful procession is headed straight toward an empty lot at the edge of the village—and the object of the celebration: a rather anticlimactic pile of bricks.

Members of the CRS-supported Masakhane savings and lending group

Members of the CRS-supported Masakhane savings and lending group in Zimbabwe are proud owners of a soon-to-be-built market stall that will help them become independent business owners. Photo by Kim Pozniak/CRS

Still, the singing and dancing continue. The women circle the bricks with obvious pride. But why? It's a pile of bricks.

But they are not just bricks. They are symbols of progress and independence, of a future of hope and possibility. And the women celebrating them are not members of a song-and-dance troupe, but are members of a community-based savings and lending group formed with the support of Catholic Relief Services.

Soon, the women will use their bricks and several bags of cement—purchased with money from their savings group—to build a market stall from which they will sell the produce of their combined fields. The profits, in turn, will mean that Tendai and the others will be able to cover their children's school fees, buy food and pay other household expenses. None of this would have been possible without Masakhane—meaning "Let's Build Each Other" in the local language—the name of the savings group.

Improved Standard of Living

Just moments before their celebratory procession, the women in orange sat on plastic boxes in a circle under the canopy of a nearby tree. They added money to a small container in the center. It was the Masakhane group's monthly meeting, when they contribute money to a savings pool from which members can receive loans and repay them at an interest rate mutually agreed on by group members.

The Masakhane group formed in early 2011 with support from CRS and our local partner, Organization of Rural Associations for Progress. Together, the women saved the equivalent of $7,000 in less than a year.

The savings—money loaned and repaid—and dividends from the interest charged on loans was paid out among the then 21 members of the group, most of whom used the money to start small businesses. One is renting a shop and selling goods to the community. Others are operating poultry businesses. A dozen or so contributed to the cement and bricks that will form the market stall, and others bought goats and donkeys, which are highly prized to farmers who can't afford machinery.

"Community-based savings groups provide families with alternative incomes—especially for women—and even in times when their husbands don't bring in an income," says Brilliant Nkomo, CRS monitoring and evaluation coordinator. "Members can improve their standard of living by strengthening their livelihood strategies."

In Zimbabwe, community-based savings and lending groups are one of a set of programs for poor residents implemented through the Promoting Recovery in Zimbabwe consortium, a collaborative effort by CRS, CARE and the economic development organization ACDI/VOCA. The goal of PRIZE, which is funded by the U.S. Agency for International Development, is to tackle the challenges accessing and producing food faced by vulnerable rural households.

Monthly meeting of the Masakhane group

During their monthly meeting, members of this community-based savings and lending group carefully record contributions to their savings fund. Photo by Kim Pozniak/CRS

"We went through a difficult time as a country," explains Nkomo, "and the groups give members coping strategies that they can turn into livelihoods."

In recent years, Zimbabwe's economy has been destabilized as a result of the country's political climate. Oftentimes men seek employment in other countries, says Nkomo. Husbands will initially send money back to their families in Zimbabwe, but all too often the flow of money stops because, in some cases, the men have started new families in their new homelands. With their savings and access to credit, groups like Masakhane help women support their families on their own.

"We've seen [the women] move away from destructive coping strategies, such as sexual favors as payment for services, for example," Nkomo says. "Others would try to smuggle in goods from neighboring countries, where they are cheaper, and then get arrested." Savings and lending groups provide a safe, reliable and legal way for members to access financial resources. The groups also establish a social fund—a pool of money—that members can access in case of personal emergencies, such as funeral or medical expenses.

'Their Lives Can Change'

"Eighty percent of participants in PRIZE projects are women, especially in the savings and lending groups," says Qonda Moyo, monitoring and evaluation manager of CRS' partner organization Organization of Rural Associations for Progress. "The groups have led to the empowerment of women, and participation in the groups opens their minds that they can also be decision makers in the household. They're being seen more as an equal partner because they bring in an income."

Tendai of the Masakhane group says she has seen dramatic improvements since joining the group. "My life has changed a lot," she says of her newly found independence. "I have my own money and don't have to ask my husband." Such independence means less pressure on the men to be the sole contributors for their family.

In addition to helping form the savings and lending groups, and training them to manage finances and undertake record keeping, CRS ensures that the groups are self-sustaining and can continue beyond the project's end. Together with our local partner, CRS identifies facilitators who spread the model to other communities and monitor the financial growth of those groups. Tendai is one such facilitator. She assists four other groups in surrounding communities that have adopted the CRS microfinance model.

"[The groups] have changed our lives very much," Tendai says. "And we hope that more people will join so their lives can change too."

Kim Pozniak is a CRS communications officer covering sub-Saharan Africa. She is based in Baltimore, Maryland.

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