Savings and credit schemes (SCSs): Towards an informal sector poverty alleviation strategy for Zimbabwe

Abstract

Savings and credit schemes (SCSs) have emerged as key components of poverty reduction strategies in developing countries. As such, governments and development partners have employed them as a grassroot approach to economic development within marginalised communities. The authors proffer an ubuntu framework as a conceptual frame to examine the contribution of SCSs towards advancing economic empowerment for poor households within the deleterious macro-economic imperatives obtaining in Zimbabwe. Primary data was collected through in-depth interviews and augmented with an extensive literature review. Ten (10) participants were purposively selected from SCSs operating in the Eastview-Caledonia community, Harare, Zimbabwe. Findings revealed that SCSs were integral to the livelihoods of marginalised households, particularly among the poor and unemployed. Members of such schemes were able to access financial capital to grow and strengthen their businesses and meet the basic health, nutritional and educational needs of their households. Further, SCSs provided social capital to members that enable them to navigate psycho-social stressors they encounter. However, cash shortages, lack of institutional protection as well as gender disparities have tended to stifle the potential of these schemes to thwart the vicious circles of poverty that entrap the poor. The paper therefore concludes that government should provide the necessary policy and legislative support to protect and entrench the interest of SCSs. In addition, SCSs should be considered critical to national development, particularly that relating to social protection for the poor. Further, SCSs should be designed to address the socio-cultural, political together with economic dimensions of the welfare of communities-at-risk.