The significance of community savings groups in informal settlements in Zimbabwe during COVID-19
During the COVID-19 pandemic, community savings groups in Zimbabwe provided crucial emotional and financial support to their members.
Community savings groups are a common feature of informal settlements around the world. These groups provide a way for people to pool their resources together and save money for common goals.
During the COVID-19 pandemic, community savings groups proved particularly important for providing financial support to members.
In particular, the Zimbabwe Homeless Peoples Federation and the Zimbabwe Young Peoples Federation came together to provide the platforms for rallying the community together around common challenges, such as COVID-19 and defining sustainable solutions through savings.
These savings brought a number of benefits to community savings group members during COVID-19.
They provided a way for people to access emergency funds when they needed them. This was especially important for people who had lost their livelihoods or had their income reduced due to the pandemic.
Financial and emotional support
These savings schemes helped people to cope with the financial stress of the pandemic. By pooling their resources together, members supported each other financially and emotionally.
Before COVID-19 hit, some savings were meant for different purposes and when the pandemic happened, the savings scheme members agreed to repurpose the savings for food and healthcare.
The savings groups also helped members to build their financial resilience. By these savings, members have started building up buffers that can help them to prepare for future economic shocks and pandemics.
A study by Slum Dwellers International found that community savings groups were an important source of financial support for people living in informal settlements during the COVID-19 pandemic.
The study found that 80% of respondents who participated in community savings groups were able to access emergency funds when they needed them.
COVID-19 safety net
The savings provided a safety net for members. When people were faced with unexpected expenses, such as medical bills or job loss, they turned to their community savings group for help and this helped to prevent people from falling into poverty or debt.
The study also found that community savings groups helped to reduce financial stress and build financial resilience among members.
In addition to the financial benefits, community savings groups also provided social and emotional support to members. By coming together regularly, members managed to build relationships and support each other through difficult times during the pandemic. This was especially important for people who were feeling isolated or alone.
These groups are a valuable resource for people living in informal settlements, and they continue to play an important role in the lives of many people.
During the COVID-19 pandemic, the Zimbabwe Homeless Peoples Federation and Zimbabwe Young Peoples Federation savings helped members to:
- Purchase food and hygiene products during the lockdown
- Pay for medical expenses and school fees
- Provide loans to members who needed money to start their own businesses
- Provide training on financial literacy to members
- Provide financial assistance to members who were facing eviction from their homes
- Advocate for the rights of informal settlers
- Promote economic development, and
- Empower women and girls.
This article was compiled by Dialogue on Shelter's Shiela Muganyi