Savings Groups and Social Safety Nets in Rural Zimbabwe: Case of Umzingwane District

Abstract

The aim of the study was to evaluate savings groups and social safety nets in rural Zimbabwe with reference to Umzingwane district. This was done through evaluation of the contribution of groups’ financial resources and social support to social safety nets, challenges faced by savings groups in providing social safety nets and strategies in place to mitigate the challenges faced by savings groups in providing social safety nets. The study adopted a sequential explanatory research design. Data was gathered using questionnaires which were administered to savings group members and interviews administered to committee members of savings groups in wards 3, 4 and 5 of Umzingwane district. The study revealed that the contribution of financial resources to social safety nets are that savings groups assist members in establishing businesses, mitigate effects of drought, in meeting education, medical, food and hygiene requirements as well as access to clean water. The study found that the contribution of social support from savings groups to social safety nets are that savings groups provide networks where ideas on handling shocks are shared and knowledge on how to mitigate risk is acquired. The study highlighted that the challenges faced by savings groups in providing social safety nets in rural Zimbabwe are inadequate loan amount, savings and social funds, politics in the groups, short loan repayment periods and lack of clear policies in handling of the social fund. The study revealed that the strategies in place to mitigate the challenges faced by savings groups in contributing to social safety nets are revision of policies in handling social funds and linkageof savings groups to mainstream banking. The study recommends that there should be clear policies in handling of social funds among the groups and that savings groups should be educated on governance insures so as to foster accountability, transparency and proper financial management to promote social safety nets.